China Investment


China: Investment growth declines to nearly 13-year low in October

November 13, 2014

In the January–October period, urban fixed-asset investment excluding rural households (FAI) rose 15.9% over the same period last year, which was just below the 16.1% increase recorded in the first nine months of the year. The reading represented the weakest expansion in investment since December 2001 and slightly undershot the 16.0% increase that the market had expected. The deceleration mainly resulted from weaker growth in the secondary sector. Investment in the tertiary sector stabilized, while growth in the primary sector accelerated to a 10-month high. In addition, the closely-watched real estate development indicator slowed further, reaching the lowest result since July 2009.

A month-on-month comparison shows that investment in urban fixed assets jumped a seasonally-adjusted 1.64% in October, which was well above the 0.76% increase tallied in September.

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 Chart

China Investment October 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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