Chinese fixed asset investment rose 2.9 percent year-to-date in October after growth of 3.1 percent in September, just below the consensus forecast for an increase of 3.1 percent. Manufacturing investment increased 6.2 percent year-to-date, as it did previously, while property investment remained very weak, dropping 9.3 percent year-to-date after a previous decline of 9.1 percent. In month-over-month terms, investment rose 0.10 percent in October after advancing 0.15 percent in September.

Investment and other activity data published today show relatively steady year-over-year and month-over-month growth in October. PMI surveys and inflation data published earlier in the month also showed relatively steady but subdued conditions. Ongoing weakness in the property market, however, continues to weigh on overall activity. Officials characterised today's data as evidence that China's economy"sustained the good momentum of recovery" in October, with their assessment providing little indication that they believe substantial changes to policy settings are required.

Activity data published today were mixed relative to expectations, but the biggest miss was to the upside. The China RPI and RPI-P rose from minus 64 to minus 21 and from minus 100 to minus 40 respectively, indicating that recent Chinese data in sum are continuing to come in below consensus forecasts.

Fixed asset investment in October is expected to hold steady at 3.1 percent growth. Recent results in this report have been slightly below consensus.

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.