China to drive global capital spending

Global spending on capital projects and infrastructure will shift from West to East, and jump to more than $9 trillion a year by 2025, according to a forecast released on Monday by accounting firm PricewaterhouseCoopers (PwC).

The growth will be driven by China, which overtook the US as the top spender on capital and infrastructure in 2009, PwC said. Globally, this investment spending stood at just $4 trillion in 2012.

"Emerging markets, especially China and other countries and regions in Asia, without the burden of recovering from a financial crisis, will see much faster growth in infrastructure spending," Richard Abadie, global capital projects and infrastructure leader at PwC, said in a statement.

About $78 trillion is expected to be spent on capital projects and infrastructure globally between now and 2025, according to the study.

Availability of funding and government finances, demographic factors, urbanization and natural resource endowments will all drive future infrastructure spending, PwC said.

In the US, capital projects and infrastructure spending is expected to reach $1 trillion annually by 2025, growing an average of 3.5 percent a year, according to the firm.

US infrastructure spending will face constraints from relatively tight government finances, but capital spending elsewhere will get a lift from the nation's shale oil boom and investment in telecommunications, it said.

However, a separate study shows that China is currently witnessing weaker capital spending, Bloomberg News reported on Monday, citing the latest China Beige Book (CBB).

The weakness in capital spending and fewer companies applying for credit added signs of China's economic slowdown, according to the latest survey of the CBB, which is published quarterly by New York-based China Beige Book International.

Half of the Chinese businesses reported higher investment, the smallest proportion and the sharpest fall since the survey began 10 quarters ago, according to the report.

Also, fewer companies than in the March survey said they expect to increase investment in the next quarter and the number of those that anticipate cutting spending increased.

The slowdown is weighing on new hiring and worker's income, and interest rates offered by shadow lenders even fell below levels offered by banks, the report said.

Meanwhile, the number of businesses applying for bank loans also dropped and fewer bankers reported increased lending to businesses in the quarter, the survey said.