| Actual | Previous | |
|---|---|---|
| Month over Month | 0.33% | 0.10% |
| Year to Date on Y/Y Basis | 3.2% | 3.3% |
Highlights
Chinese fixed asset investment rose 3.2 percent year-to-date in December, down slightly from the 3.3 increase recorded year-to-date in November and the lowest growth rate of the year. Property investment was again weak, falling 10.6 percent year-to-date, but growth was solid in other sectors, with manufacturing investment up 9.2 percent year-to-date. In month-over-month terms, fixed asset investment increased 0.33 percent after advancing 0.10 percent previously
Today's data follow a series of policy measures announced by Chinese officials in September and October in response to ongoing weakness in the property sector and sluggish growth in consumer spending and manufacturing output. Officials lowered the seven-day reverse repo rate, cut banks' reserve requirements, and brought forward planned government spending.
In their statement accompanying today's data, officials characterised the data as showing the economy is"generally stable with steady progress", judging that conditions have"recovered remarkably" in response to their"timely" policy measures. Officials, however, provided little guidance about whether additional changes to policy settings will be considered in the near-term.
Data published today were generally stronger than consensus forecasts. The China's RPI rose from minus 14 to plus 56 while the RPI-P rose from minus 30 to plus 69, indicating that recent Chinese data in sum are now coming in well above consensus forecasts.
Today's data follow a series of policy measures announced by Chinese officials in September and October in response to ongoing weakness in the property sector and sluggish growth in consumer spending and manufacturing output. Officials lowered the seven-day reverse repo rate, cut banks' reserve requirements, and brought forward planned government spending.
In their statement accompanying today's data, officials characterised the data as showing the economy is"generally stable with steady progress", judging that conditions have"recovered remarkably" in response to their"timely" policy measures. Officials, however, provided little guidance about whether additional changes to policy settings will be considered in the near-term.
Data published today were generally stronger than consensus forecasts. The China's RPI rose from minus 14 to plus 56 while the RPI-P rose from minus 30 to plus 69, indicating that recent Chinese data in sum are now coming in well above consensus forecasts.
Definition
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.
Description
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.
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.
