China Investment November 2016


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.

FocusEconomics Consensus Forecast participants expect fixed-asset investment to grow 7.9% in 2017, which is down 0.3 percentage points from last month’s Consensus. In 2018, the panel sees fixed-asset investment growth at 7.8%.

Author: Ricard Torné, Lead Economist

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China Investment Chart

China Investment November 2016

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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