Young Members of Parliament whom I met were upbeat about India's future. Of course, India's growth trajectory will not be a straight line. Development across states will be uneven. Unlike China, power does not rest with one political party. The intricacies of coalition politics mean that time, patience, skill and political bargaining will be needed to balance different interests, and forge a national consensus on reforms. Investors have cited inadequate infrastructure, rigid regulations and bureaucracy as some of the impediments to India's rapid growth. In addition, India cannot grow into a major economy on services alone. It will have to find ways to expand its manufacturing sector to create jobs for the large numbers of young people entering the labour market each year. India has decided to use Special Economic Zones (SEZs) to spearhead the growth of its manufacturing and export sectors. SEZs will create pockets of growth and prosperity. They will have a powerful demonstration effect on the rest of the economy. Foreign investors will find it easier and more attractive to locate their factories in an SEZ. Singapore and India have agreed to set up an SEZ in India and both sides are now working to implement it. China on the rise Let me now turn to China. I first visited China in 1971 to do business with them. It was during the height of the Cultural Revolution. I saw young Red Guards holding their study sessions in the open.
For example, in India they lead to an increase in saving of around 10 percentage points of GDP, raising the saving ratio to 50% by 2050, as demographics push a larger fraction of the population into the high savings cohort. Among developed countries, meanwhile, these trends are reversed with further demographyinduced falls in savings rates. 5  12  See also the evidence in Wilson and Ahmed (2010). BIS Review 174/2010  Given the rising income share of the BRIC countries, these patterns are even more dramatic when we consider country shares of future global savings. China rises to represent around 40% of global savings by 2050. Over the same period, the US share of global savings continues its descent, stabilising at around 5%. On the face of it, these partial equilibrium projections of future savings rates suggest that medium-term pressures on global imbalances could intensify, with saving rates rising among surplus countries and falling in deficit countries. To bring this intuition to life, assume for simplicity’s sake that investment rates as a fraction of GDP remain fixed at 2010 levels across countries, but that saving rates evolve as in Chart 23. The result would be a trebling of global imbalances from current elevated levels over the next twenty years. Of course, these projections only look at the marginal impact on imbalances of medium-term demographic and GDP trends.