China devotes a high proportion of GDP to investment
Investment is important for the health of the macroeconomy, because investment must take place if the potential capacity of the economy to produce is to increase over time. It is thus a major factor in determining how rapidly an economy is able to grow in terms of GDP or GNI.
In economic terms, it represents the sacrifice of present consumption in order to be able to increase the future productive capacity of the economy. At the end of the day, output of firms cannot increase in the long term unless those firms invest funds in new machinery, factory buildings, office blocks, new computer software and so on.
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