Chinese fixed asset investment rose 4.7 percent year-to-date in April, moderating from growth of 5.1 percent in March but above the consensus forecast of 2.7 percent. Investment in infrastructure and manufacturing rose 8.5 percent and 6.4 percent respectively on the year, offset by a 6.2 percent decline in property investment. In month-over-month terms, fixed asset investment declined 0.64 percent in April after falling 0.25 percent in March.

Growth in fixed asset investment is expected to slow to 2.7 percent in April. This would compare with 5.1 percent growth in March which was lower than expected.

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.

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.