Local governments indebtedness soared, and fixed investment surged toward an unprecedented 50 of GDP.

In fact, fixed business investment as a share of GDP is some 2 lower today than 4 years ago.

With the housing sector accounting for 10 of GDP and investment in real estate development accounting for 25 of total fixed investment, any decision to rein in runaway housing prices will be difficult.

Nevertheless, annual GDP grew by 8.7 , thanks to 16.9 growth in consumption (measured by gross sale of consumer goods) and a 33.3 surge in fixed investment demand.

OFDI flows as a percentage of gross fixed capital formation (GFCF) are considerably higher than the world average for such economies as Hong Kong (China), Taiwan Province of China, the Russian Federation and Singapore.

Table 2. FDI outflows as a percentage of gross fixed capital formation in selected economies, 2001 2003a

The surplus has narrowed because investment has been ramped up even higher, to roughly 49 of GDP.

This apparent paradox is explained by a combination of high corporate saving and low levels of residential and non residential fixed investment.

Funding for this strategy increased almost four fold in 2004 2005, for a total investment of  40 million.

Export growth was often very fast, as in the Philippines, Mexico, and to some extent Morocco.

In fact, construction and real estate are the most promising candidates, as they account for roughly one third of European fixed investment and more than 17 million jobs.

Investing in US Treasuries, after all, was a sure loss maker, given the gap between their modest yield and the steady appreciation of the yuan.

Now GDP growth is slowing, investment is falling, the budget deficit is widening, and the external accounts are weakening.

In China, Brazil, Malaysia, and Mexico, foreign direct investment (FDI) accounts for 8 to 12 of gross fixed capital formation without generating debt.

Now, with so much fixed capital and infrastructure destroyed by the earthquake and tsunami, the economy s productive capacity has fallen by an estimated 2 of GDP.

In the US, neither R D nor overall investment is declining. Indeed, many industries pursue long term investments, notwithstanding their short term stockholders.

Governments often become enamored of innovative sectors, such as semiconductors, that account for only a very small share of total investment.

And, as GDP growth has become increasingly dependent on government led investment, currency demand has continued to rise.

CBR Constant bit rate a Peak Cell Rate (PCR) is specified, which is constant.

Its imbalances have gotten worse as well, with the investment share of GDP approaching 50 and private consumption falling below 35 of GDP.

While the increase in investment reduced the saving GDP ratio, the resulting increase in imports lowered the trade surplus GDP ratio.

As a result, FDI collapsed to less than 0.5 of GDP annually in 2011 2012.

By 2012, human capital s contribution to China s GDP growth fell almost to zero, with fixed capital accumulation accounting for roughly 60 of total growth.

Today, domestic investment has plummeted, exports are languishing, and GDP growth is down to around 4.5 per year.

This is reflected in the current investment ratio for real capital assets of 43 of GDP, compared to 4.3 investment in human capital in the form of education.

China s real estate investment accounted for 10 of GDP, and slower investment growth in the sector necessarily reduces import demand, directly and indirectly.

In the early stages of the post war transition, FDI increased rapidly, rising from 1.2 of GDP in 2002 to a peak of 4.3 of GDP in 2005.

Total fixed asset investment amounted to 41.6 of GDP, on average, peaking at 67 of GDP in 2009, a level that would be unthinkable in most developed countries.

Is it possible that the cash rich corporate sector will more than make up for the slack by increasing investment? There may well be some increase in gross investment, as obsolete equipment and software are replaced.

The key to restoring China s GDP growth is, therefore, returning fixed asset investment growth to at least 25 .

But competitive pressures and the long gestation period of fixed capital outlays multiply optimism, leading to more investment being undertaken than is actually profitable.

In 1995 2010, when China s average annual GDP growth rate was 9.9 , fixed asset investment (investment in infrastructure and real estate projects) increased by a factor of 11.2, rising at an average annual rate of 20 .

The annual general industrial statistics cover the following data items number of establishments enterprises number of persons engaged number of employees by gender wages and salaries paid to employees output value added and gross fixed capital formation.

In 2004, the volume of foreign direct investment in South East Europe reached the level of 5 per cent of the regional countries' collective gross domestic product.

Sources World Bank, World Bank Development Indicators 2005 (GDP per capita) and UNCTAD, UNCTAD Handbook of Statistics, 2004 (inward FDI).

The problem is that the investment share of China s GDP is already about 50 , while double digit investment growth in 2013 is expected to push that rate still higher.

And they say, Oh, yeah. Constant acceleration.

A drop of one percentage point in China s investment rate is estimated to reduce Taiwan s GDP growth rate by 0.9 percentage points and Korea s by 0.6 percentage points.

First, governments need to focus on sectors in which action is likely to trigger renewed investment on a scale large enough to boost GDP and quickly enough to enable private investment to drive the recovery.

But growth at this level reflects an unprecedented and unsustainable rise in domestic investment to nearly 50 of GDP.

Investors around the world would take on Japanese GDP risk in return for an expected yield, just as with catastrophe bonds.

China currently saves and invests half of its GDP, but, as its workforce shrinks in the coming years, its investment rate is likely to fall sharply.

So China is stuck in a currency creating cycle GDP growth encourages investment, which boosts demand for capital.

Liberia has the highest ratio of foreign direct investment to GDP in the world, with US 16 billion in investment since 2006.

This occurs at the altitude of geostationary orbit.