China Investment

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China: Investment activity continues to moderate in May

June 11, 2015

In the first five months of the year, urban fixed-asset investment excluding rural households (FAI) expanded 11.4% over the same period last year, which was below the 12.0% increase recorded in the January-April period. The reading represented the weakest expansion in investment since 2000 and undershot the 11.9% increase that market analysts had expected. The deceleration mainly resulted from weaker dynamics in the secondary and the tertiary sectors. Conversely, growth in the primary sector gained momentum in May. In addition, the closely-watched real estate development indicator moderated again in the January-May period, reaching the lowest annual growth since the trough of the financial crisis in 2009.

A month-on-month comparison shows that investment in urban fixed assets rose a seasonally-adjusted 0.86% in May, which was broadly unchanged from the 0.87% increase tallied in April and marked a 19-month low.

The government set a growth target of 15.0% for urban fixed-asset investment for this year. FocusEconomics Consensus Forecast participants expect fixed-asset investment to grow 14.9% in 2015, which is down 0.3 percentage points from last month’s Consensus. In 2016, the panel sees fixed-asset investment growth slowing to 14.2%.


Author: Ricard Torné, Head of Economic Research

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China Investment May 2015

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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