China’s FAI in infrastructure still increases at far lower rate than GDP

Thursday, 15 August 2019 10:52:52 (GMT+3)   |   Shanghai

In the January-July period of this year, total fixed asset investments (FAI) (excluding rural households) in China amounted to RMB 34.89 trillion ($4.98 trillion), up 5.7 percent year on year, as announced by China's National Bureau of Statistics (NBS), with the year-on-year increase 0.1 percentage point lower compared to that recorded for the January-June period this year. In July alone, FAI (excluding rural households) in China increased by 0.43 percent month on month.

However, in the January-July period, total FAI in China's infrastructure rose by 3.8 percent year on year, 0.3 percentage points lower than the increase recorded in the January-June period. The growth in FAI in infrastructure has been far lower than GDP growth since the beginning of this year as China has aimed to cut back on leverage and curb the growth of hidden debt. However, analysts think that the growth in FAI in infrastructure will likely increase in the second half of the year, though remaining within a certain range.

In the first seven months of the year, total FAI in China's mining sector was up 27.4 percent year on year, while FAI in China's manufacturing sector rose by 3.3 percent year on year, with the year-on-year increase rates in question up 5.1 percentage points and 0.3 percentage points compared to those recorded for the January-June period. 

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