##integrated into global production - sharing networks. for example, machinery and electrical products, which feature heavily in production - sharing and which make up about half of exports in other emerging asian economies, account for only 15 percent of india ’ s exports. foreign direct investment into india is about half the size of similar flows into china as a percentage of gdp, and gdp per capita, at $ 1, 600 in 2014, remains considerably below emerging asia ’ s average. all told, while the export - led growth model that propelled growth in china and other economies in emerging asia has matured, pushing down growth rates, india remains at a relatively early stage of its development trajectory. further capital deepening and the potential for further productivity gains suggest that india could maintain rapid economic growth for a number of years. as mentioned previously, india is also a young country, with a relatively low dependency ratio and a growing workforce. by united nations estimates, india is set to overtake china during the next decade as the world ’ s most populous nation. in the 1960s and 1970s, the indian economy grew at around 3 to 4 percent. in subsequent decades the growth rate averaged close to 6 percent, and in the early years of this century it rose further, as can be seen in table 1. in 2015, growth in india is expected to be 7 - 1 / 4 percent, the fastest among large economies, and the imf expects growth to pick up from this already rapid pace through the end of the decade. growth has been supported by an improved macroeconomic policy framework, including a strengthening of the framework for conducting monetary policy, as well as legal and regulatory reform. and the authorities have embarked on an ambitious program to improve the business environment. that said, significant roadblocks need to be overcome for india to reach its full potential. the economy continues to suffer from a number of infrastructure bottlenecks that will be alleviated only through a pronounced increase in investment rates, a process that would likely be helped by a relaxation of restrictions on foreign direct investment. likewise, efforts at difficult reform will have to be sustained. there is much hard work ahead if india is to come closer to fulfilling the potential that it so manifestly has. bis central bankers ’ speeches concluding remarks the performance of the asian economies – notably those of east asia, particularly china, japan, and korea – especially in the past six or seven decades, is an outstanding, if not unique, episode in the history of the global economy. what lies

rate of above 6 percent is not slow ; it is slower than it has been, but it remains impressive. there are four factors weighing on emerging asian growth that i would like to highlight. first, emerging asia continues to be negatively affected by slow demand growth elsewhere, including in the advanced economies. second, economies generally decelerate as they develop, a pattern that has already been evidenced in many of emerging asia ’ s growth pioneers. third, the tremendous growth of trade in the region, driven by the process of global integration and the growth of production - sharing networks, may have plateaued. lastly, demographic trends in a number of emerging asian countries are likely to affect growth in the coming years. 4 regarding the first of the factors that i just listed, contrary to often - repeated and oftenresurrected stories of emerging market growth “ decoupling ” from that of the advanced economies, the truth is that advanced - economy demand continues to play a key role in emerging asia ’ s economic conditions. 5 and, as we all know, advanced - economy demand for imports in recent years has been lackluster. real goods imports in the united states, japan, and the euro area have all increased at an average annual pace of about 3 - 1 / 2 percent over the past three years, in all cases about half the average pace recorded in the two decades leading up to the financial crisis. regarding the second factor, as is well established by theory and supported by empirical experience, economic growth tends to decelerate as a country develops. in a capital - poor developing economy, initial increases in investment generally have high returns, which then decline as capital accumulates. likewise, the initial phase of integration with the global economy is typically marked by strong gains in productivity as methods and technologies are adopted from more advanced economies. over time, the boost to growth from this catch - up in productivity fades. also, as incomes rise and consumption grows, there is a tendency for a relatively rapid increase in demand for services. the shift of domestic resources toward the production of services, which are typically associated with lower productivity growth, tends to further lower trend growth. the factors that have tended to temper growth as economies develop appear to be at play in china. following years of exceptionally high investment, the return on capital appears to be moderating, and the ratio of investment to gross domestic product ( gdp ), after peaking near the imf does not include hong kong, korea, singapore, or taiwan in its