China’s return on investment has declined steadily and is now negative in many cases. Economic indicators suggest the Chinese economy will never overtake the U.S. economy. Photo courtesy of The Borgen Project. China’s economy is often described as an unstoppable force that will inevitably displace the United States as the world’s dominant economic power. However, this belief is not supported by the data. For roughly four decades, China has channeled approximately 40 percent of GDP annually into state-directed investment, a ratio with no precedent among major modern economies. The World Bank puts China’s gross fixed capital formation at 40.45 percent of GDP in 2023, against a U.S. figure of 21.6 percent. What that investment once produced in growth, it no longer delivers. Investment is beneficial…
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