China: Investment growth stabilizes in November
December 14, 2016
In the first eleven months of the year through November, urban fixed-asset investment (FAI), excluding rural households, expanded 8.3% from the same period last year, mirroring October’s result. The reading was in line with what market analysts had expected. A month-on-month comparison shows that investment in urban fixed assets rose a seasonally-adjusted 0.54% in November, slightly below the 0.58% increase in October.
November’s figure was the result of stronger growth in the secondary sector, which compensated for weaker dynamics in the primary and the tertiary sectors. The closely-watched real estate development indicator lost some steam in November, after hitting a five-month high in October, partially reflecting the tightening measures implemented in some top cities in Q4.
Analyzing November’s data from the ownership side, investment growth among state-owned and state-holding units slowed to a nine-month low, although it still expanded a strong 20.2%. Activity among private companies accelerated in November and expanded 3.1%. This combination of stronger private sector activity and a moderation among public-related companies bodes well for China’s economic transition. That said, the wide gap between the two sectors signals that the pace of economic rebalancing is only moderate.