Chinese fixed asset investment rose 3.0 percent year-to-date in December, slightly stronger than the 2.9 percent growth recorded in November and just above the consensus forecast for an increase of 2.9 percent. In month-over-month terms, investment rose 0.09 percent after advancing 0.26 percent previously.

In addition to monthly data for December and the quarterly GDP data published today, officials also published annual data, which they characterised in the accompanying statement as evidence of steady improvement in the economy's"momentum of recovery". Officials will announce growth and inflation forecasts for 2024 at the annual meeting of the National People's Congress in March, but today's statement suggests officials remain comfortable with current policy settings for now, despite ongoing weakness in the property market.

Today's GDP and monthly activity data were broadly in line with consensus forecasts, except for retail sales, which were somewhat weaker than expected. The China RPI rose from minus 14 to zero and the RPI-P rose from minus 10 to plus 10, indicating that recent Chinese data in sum are coming in close to consensus forecasts.

Fixed asset investment in December is expected to hold at 2.9 percent growth in both November and October.

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.