China Investment October 2019


China: Investment growth falls to a record low in January–October

November 14, 2019

Nominal urban fixed asset investment expanded 5.2% year-to-date in October, below the 5.4% increase in January–September. The reading undershot market expectations of a 5.4% rise and represented the lowest print since the data started in 1998.

The reading reflected a slowdown in growth in the tertiary sector as well as a sharper decline in the primary sector. The secondary sector, however, posted an acceleration in the same period. Meanwhile, property investment growth slowed slightly to 10.3%, the lowest rate since the start of the year. In terms of ownership, investment growth in fixed assets of state-owned enterprises accelerated in January-October, while the expansion in investment among private companies softened to a nearly three-year low in the same period.

On a month-on-month basis, investment in urban fixed assets rose a seasonally-adjusted 0.40% in October, marginally down from the 0.42% expansion in September.

Yi David Wang, head of China economics at Credit Suisse, noted that:

“Looking ahead, domestic demand indicators will likely remain tame over the next couple of months. However, we maintain the view that an inflection point to underlying growth momentum will likely occur by December/January in light of our outlook for more supportive polices to come in 2020.”

FocusEconomics Consensus Forecast participants expect nominal fixed-asset investment to grow 5.5% in 2020, which is unchanged from last month’s Consensus. In 2021, the panel also sees nominal fixed-asset investment growth at 5.5%.

Author: Ricard Torné, Lead Economist

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China Investment Chart

China Investment October 2019

Note: Month-on-month changes of seasonally adjusted urban fixed-asset investment index and annual growth rate (year-to-date) in %.
Source: National Bureau of Statistics of China (NBS).

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