China Fixed-Asset Investment
CEIC Gallery/Emerging Economies - August 18, 2016 Summary China's fixed-asset investment (FAI) growth continued to slow towards the end of July. According to the NBS, FAI for the first seven months grew 8.1% YoY to Rmb31.2 trn, down from the 9% YoY rise for the first half year. YoY growth of private sector FAI further decelerated from an already weak 2.8% YoY rise for the first six months to only 2.1% YoY during the January-July period. FAI includes capital spent on infrastructure, property, machinery and other physical assets. Chart 1 & 2
Chart 1 & 2: Fixed asset investment (FAI) for the first seven months rose 8.1% YoY to Rmb31.2 trn, further slowed down by 0.9ppt from 9% YoY for the first half year, marking the slowest growth since 1999. On the month-on-month basis, YTD growth maintained around 0.3%.
Chart 3.1 & 3.2
Chart 3.1: VAI growths for the same period showed an evident deviation from that of FAI, which put a question mark on the "contracting story" of China Economy. YoY growth of YTD FAI picked up by 0.6ppt from 5.4% at the beginning of year to 6% as end of July while MoM growth slightly increased to 0.52%.
Chart 3.2: The deviation is partially attributable to the exception value of Liaoning Province's tumbling FAI since last September, which added noises to the data.
Chart 4.1 & 4.2
Chart 4.1: Although investment from state-owned enterprises (SOE) remained the biggest contributor, YoY growth decelerated by 1.7ppt to 21.8% as the end of July.
Chart 4.2: Investment from collective and share cooperative enterprises encountered big slump since the beginning of the year, which even worsened towards the end of July with large declines of 41.3% and 49.4% YoY, respectively.
Chart 5.1 & 5.2
Chart 5.1: The property sector market marked the third straight months of deceleration to a YoY growth of 6.2%.
Chart 5.2: Manufacturing investment remained sluggish by slightly rising 3% YoY to Rmb10 trn.
Chart 6.1, 6.2 & 6.3
Chart 6.1 & 6.2: The only two growing sectors are automobile and high-tech manufacturing, which both saw picked-up YoY growths, namely, 7.7% and 9.8%, respectively.
Chart 6.3: Infrastructure investment continued acting as the backing but with less power this time. YTD YoY growth slowed down to 19.6% as the end of July.
Chart 7.1 & 7.2
Chart 7.1: Private sector FAI growth further slowed down to 2.1% YoY in the first seven months, mainly due to the slowdown in 1) export manucaturing; 2) entrance barriers for private companies in some sectors; 3) limited access to loans and 4) widespread flooding in some areas.
Chart 7.2: Contribution of private sector to China's overall FAI maintained around 62.4% after a big slump at the beginning of the year.
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