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China has long relied on infrastructure investments to stimulate economic growth.
Investments contributed to 44% of China's nominal GDP in December 2017, compared to around 20-25% for countries like the United States, Japan and Germany, according to figures compiled by the data provider economic CEIC.
China's capital investment is slowing, however, as investment growth reached a record high in August. Economists, including Nicholas Lardy of the Peterson Institute for International Economics, warn, however, against paying too much attention to the historically low figure, as China is revising the way it measures capital investments.
However, as the trade war intensifies, the Chinese government will not be able to easily use government spending to stimulate investment because of its growing debt.
The world's second-largest economy had a relatively stable level of debt until the 2008 financial crisis when it had spent 12.5% of its GDP on stimulating the economy.
The country had encouraged loans to stimulate economic growth, with Chinese banks issuing loans worth a record 12.65 billion yuan ($ 1.88 trillion) in 2016. The credit boom has worried authorities. .
According to DBS and CEIC, China's debt to GDP has steadily increased to about 250 percent, or about $ 28 billion.
However, the Institute of International Finance has placed Chinese debt at over 300% of GDP.
