| Actual | Previous | Revised | Consensus | |
|---|---|---|---|---|
| Month over Month | 0.49% | -0.87% | -0.54% | |
| Year to Date on Y/Y Basis | 5.1% | 5.3% | 5.0% |
Highlights
Chinese fixed asset investment rose 0.49 percent on the month in December after falling 0.54 percent in November, with year-to-date growth moderating from 5.3 percent to 5.1 percent, just above the consensus forecast for an increase of 5.0 percent. Previously published PMI survey data showed ongoing weakness in economic conditions in December, with activity and sentiment impacted by a surge in Covid-19 cases in many parts of the country after authorities eased public health restrictions late in the year.
Market Consensus Before Announcement
Growth in fixed asset investment fell 5 tenths in November to a lower-than-expected 5.3 percent growth rate. December's consensus is 5.0 percent. This reading is on a year-to-date year-over-year basis.
Definition
Investment in fixed assets refers to the investment in construction and purchase of fixed assets by private and state-controlled domestic enterprises and households (excluding rural households) involving a total planned investment of CNY5 million yuan or more. Separate data for private investment and state-controlled investment are published as well as more detailed data on an industry basis.
Description
Investment in fixed assets is an important part of gross domestic product and also provides the additional productive capacity to an economy that is required to drive future growth. Strong growth in this category of spending indicates that enterprises are confident about future prospects and is generally associated with rising employment and incomes.
Investment in fixed assets therefore provides information about near-term and future economic growth. Investors need to closely track the economic growth because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios.
Investment in fixed assets therefore provides information about near-term and future economic growth. Investors need to closely track the economic growth because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios.
