Fact of the Week: China’s Current Level of Productive Capital Investment Is 8 Times Greater Than That of the United States

Source: Anna Kortis, et al., “Catalyzing Competitiveness: Where Investment Happens and Why” (McKinsey Global Institute, June 30, 2026).

Commentary: Investment in productive capital, such as non-residential structures, infrastructure, machinery and equipment, research and development (R&D), and software, has a significant, positive effect on productivity. In fact, research from the McKinsey Global Institute has found that productive capital investments account for up to 80 percent of productivity growth. Though the United States is the largest economy in the world, it ranks second on all measures of productive investment. China was the world’s largest investor in productive capital in 2024, investing $11.9 trillion when adjusted for purchasing power parity (PPP), equivalent to 31 percent of gross domestic product (GDP). In comparison, the United States invested just $5.1 trillion, or 17 percent of GDP.

This gap is even greater, however, when looking at net investment. In the United States, a large share of productive capital investment is done to replace deteriorating or obsolete assets, while China, because it has relatively newer infrastructure, can dedicate the bulk of its investment to new capital. In 2024, U.S. net investment was $1.1 trillion. In China, net investment was $8.8 trillion in PPP-adjusted terms, 8 times greater than the United States. As a share of GDP, U.S. net investment was equivalent to 4 percent, while China’s investment reached 23 percent of GDP.