Chinese fixed asset investment rose 3.1 percent year-to-date in September after growth of 3.2 percent in August, just below the consensus forecast for an increase of 3.2 percent. Manufacturing investment increased 6.2 percent year-to-date in September, up from 5.9 percent in August, while property investment remained very weak, dropping 9.1 percent year-to-date after a previous decline of 8.8 percent. In month-over-month terms, investment rose 0.15 percent after advancing 0.26 percent previously.

In a statement accompanying today's activity data, officials described China's economy as having"sustained the momentum of recovery and improvement" with both demand and production increasing. The statement provided little guidance, however, about whether officials consider that further policy support will be required, merely noting that policy is continuing to be implemented"in a precise and robust way" to expand domestic demand and boost confidence.

GDP and other monthly activity data published today were stronger than expected. The China RPI and RPI-P rose from minus 41 to plus 16 and from minus 30 to plus 50 respectively, indicating that recent Chinese data in sum are now coming in above consensus forecasts.

Fixed asset investment in September is expected to hold steady at 3.2 percent in August which was down from July growth of 3.4 percent.

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.