Robust building of physical capital for innovation
Physical capital is the most abundant of all the types of capital thanks to decades of investment-driven growth. While the misallocation of capital over the past decades is manifest in excess capacity in a number of manufacturing sectors, the channelling of investment towards high-tech and new industries is apparent in recent years (Figure 1).
Figure 1. High-technology investment is expanding rapidly
Share of investment in high-tech industries in total fixed asset investment
![High-tech industries includes pharmaceutical manufacturing, aviation, spacecraft equipment manufacturing, electronic and communication equipment manufacturing, computers and office equipment manufacturing, medical equipment and instrument manufacturing in the Chinese industrial classification system. [Photo/Source from China Statistics Yearbook on High Technology Industry 2015 and National Bureau of Statistics.]](http://www.bazhesc.com/2016/0906/201696165753.jpg "High-tech industries includes pharmaceutical manufacturing, aviation, spacecraft equipment manufacturing, electronic and communication equipment manufacturing, computers and office equipment manufacturing, medical equipment and instrument manufacturing in the Chinese industrial classification system. [Photo/Source from China Statistics Yearbook on High Technology Industry 2015 and National Bureau of Statistics.]")
High-tech industries includes pharmaceutical manufacturing, aviation, spacecraft equipment manufacturing, electronic and communication equipment manufacturing, computers and office equipment manufacturing, medical equipment and instrument manufacturing in the Chinese industrial classification system. (Photo/Source from China Statistics Yearbook on High Technology Industry 2015 and National Bureau of Statistics.)
