Chinese fixed asset investment rose 4.2 percent year-to-date in April, moderating from 4.5 percent in March. In month-over-month terms, fixed asset investment fell 0.03 percent in April after advancing 0.14 percent in March.

Officials characterised monthly data published today as showing that"the national economy was generally stable and continued to rebound and progress well". Although they acknowledged growth in some indicators moderated, they attributed this to the impact of lunar new year holidays and base effects. Officials also warned, however, that"the external environment is becoming more complex, severe and uncertain" and that the domestic economy still faces"multiple difficulties and challenges". They noted that they will seek to"frontload and effectively implement" macroeconomic policies that have already been introduced, suggesting that they do not yet see a case for a major shift in policy settings.

Monthly activity data published today were weaker than expected, with fixed asset investment growth falling short of the consensus forecast for year-to-date growth of 4.7 percent. China's RPI fell from plus 29 to minus 21 and the RPI-P fell from plus 40 to minus 30, indicating that recent Chinese data in sum are now coming in below consensus forecasts.

Fixed asset investment for the year-to-date to April is expected to rise 4.7 percent. This would compare with better-than-expected growth of 4.5 percent in March.

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.