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China: Downward spiral in investment growth continues in September

October 21, 2014

In the January–September period, urban fixed-asset investment excluding rural households (FAI) rose 16.1% over the same period last year, which was just below the 16.5% increase recorded in the first eight months of the year. The reading represented the weakest expansion in investment since December 2001 and slightly undershot the 16.3% increase that the market had expected. The deceleration mainly resulted from weaker growth in the tertiary sector, whereas investment in the primary sector accelerated. Growth in the secondary sector stabilized in September. In addition, the closely-watched real estate development indicator slowed further, reaching an over-five-year low.

A month-on-month comparison shows that investment in urban fixed assets rose a seasonally-adjusted 0.77% in September, which was below the 0.96% increase tallied in August.

The government set a growth target of 17.5% for urban fixed-asset investment for this year. FocusEconomics Consensus Forecast participants expect fixed-asset investment to grow 17.5% in 2014, which is up 0.1 percentage points from last month’s Consensus. In 2015, the panel sees fixed-asset investment growth slowing to 17.0%, which is down 0.1 percentage points over the previous month’s projection.


Author: Ricard Torné, Lead Economist

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China Investment September 2014

Note: Month-on-month changes of seasonally adjusted urban fixed-asset investment index and annual growth rate (year-to-date) in %. Owing to seasonal factors related to the Lunar New Year, annual figures in January and February are reported together.
Source: National Bureau of Statistics of China (NBS).


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