Chinese fixed asset investment rose 4.2 percent on the year-to-date for January and February combined, accelerating from an increase of 3.0 percent in December and above the consensus forecast of 3.2 percent. Separate year-over-year data for January and February are not published because of the impact of differences in the timing of lunar new year holidays from year to year. In month-over-month terms, fixed asset investment rose 0.88 percent in February.

Officials characterised today's data as evidence that"the national economy maintained the momentum of recovery and growth and got off to a stable start" for 2024. However, although industrial production and fixed asset investment both recorded stronger year-over-year growth in the first two months of the year relative to December, growth in retail sales weakened. PMI survey published since the start of the year have shown ongoing weakness in the manufacturing sector but modest growth elsewhere in the economy.

Today's monthly activity data for January and February combined were considerably stronger than consensus forecasts. The China RPI rose from minus 7 to plus 50 and the RPI-P rose from minus 13 to plus 60, indicating that recent Chinese data in sum are now coming in well above consensus forecasts.

Fixed asset investment for the combined months of January and February is expected to rise 3.2l percent. This would compare with 3.0 percent growth in December and 2.9 percent growth in November.

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.