China: Nominal fixed investment records slowest expansion since December 2020 in September
Nominal urban fixed asset investment grew 7.3% in year-to-date terms in September, which was a deterioration from August’s 8.9% increase. The figure marked the worst reading since December 2020, and was driven by weaker momentum in the primary, secondary and tertiary sectors. Real estate showed particular weakness, amid Beijing’s attempts to rein in the sector and reorient capital towards high-end manufacturing.
On a monthly basis, nominal urban fixed asset investment grew 0.2% in seasonally-adjusted terms in September, matching August’s uptick.
Looking to 2022, fixed investment growth is likely to slow relative to 2021 amid a cooling housing sector and regulatory uncertainty due to the government’s clamp down on the technology and other sectors. However, high-end manufacturing investment, thanks to government support under the dual-circulation strategy, should be robust.