China has the highest risk of a downturn among 32 of the world’s largest economies stemming from its outsized proportion of investment spending, according to Standard & Poor’s.

Australia, India and Vietnam show an “intermediate risk” of a slowdown based on comparisons of investment, size of gross domestic product and growth, Terry Chan, a Melbourne-based analyst for the credit-ratings company, wrote in a report released today. China has the highest investment-to-GDP ratio in the world, the report said.

The analysis underscores concern that China’s dependence on investment spending to drive growth is unsustainable, with the nation’s new leaders vowing to pursue better-quality expansion and increase consumption. The World Bank warned this month that there would be “significant domestic and global consequences” from an abrupt drop in China’s “unusually high investment rate.”

“We believe the level of a country’s investment overhang can be a leading indicator of a potential economic correction,” S&P said. “We consider overinvestment as being a sustained decline in investment productivity.”

Other countries in the intermediate-risk category include Brazil, Canada, France, Indonesia and South Africa, S&P said. Nations with the lowest risk from overinvestment include the U.S., Japan, Germany, Mexico and Ireland. (Bloomberg)