(Yicai) March 17 — China’s fixed-asset investment rose in the January to February period, reversing its continuous fall since last September and making it one of several major economic indicators showing significant recovery, with the country’s economy making a strong start this year.
Fixed-asset investment, excluding rural households, climbed 1.8 percent to CNY5.27 trillion (USD764 billion) in the first two months from a year earlier, according to data released by the National Bureau of Statistics yesterday. Excluding real estate development investment, which plunged 11 percent to CNY961.2 billion (USD139 billion), the figure jumped 5.2 percent.
In addition, China’s value-added industrial output rose 6.3 percent, while retail sales of consumer goods increased 2.8 percent to CNY8.61 trillion. The figures were up from December’s 5.2 percent and 0.9 percent year-on-year growth, respectively.
The Chinese economy has had a strong start and a favorable beginning this year, Fu Linghui, spokesperson for the NBS, said at a press conference held by the State Council Information Office on the same day. Despite the turbulent international environment and rising external risks, particularly those stemming from geopolitical tensions, China has implemented more proactive and effective economic policies, Fu added.
Over the first two months, production and supply grew rapidly, domestic demand expanded steadily, employment and prices remained generally stable, and new quality productive forces continued to strengthen, Fu pointed out.
However, the later time of this year’s Chinese New Year break resulted in a shift in the overall cycle of “rush before the holiday — pause during the holiday — resumption after the holiday,” which inflated the year-over-year data for January and February, noted Luo Zhiheng, chief economist at Yuekai Securities, adding that this month’s results may experience downward pressure.
Luo cautioned against overly optimistic interpretations of the “good start” in the first two months of the year, suggesting that a potential decline this month should not be simply viewed as a weakening of economic momentum. The overall first-quarter data should be used to better assess the true economic performance, he stressed.
This year’s Government Work Report sets the annual growth target at 4.5 percent to 5 percent, with a call to “strive for better results in actual work,” said Wen Bin, chief economist of China Minsheng Bank. Fiscal spending will continue to maintain a significant scale, while structural monetary policy tools will be further optimized and innovated, with a noticeable increase in efforts to expand domestic demand, he added.
The economy will have a lower growth rate at the beginning of the year and a higher rate later, Wen noted, without ruling out the possibility of exceeding expectations.
Due to the later time of the Chinese New Year and the pre-holiday rush effect, the negative impact of the long holiday on industrial production will extend into this month, Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, told Yicai. Export growth is also likely to tumble, which will weaken its supporting role for industrial production, Wang added.
The year-on-year growth rate of value-added industrial output in March is expected to slow down to around 5 percent, according to Wang. Looking at the entire year, diminishing export growth, ongoing adjustments in the domestic real estate market, and continued efforts to reduce excessive competition may all have certain impacts on industrial production from the supply and demand sides, Wang stressed.
Manufacturing investment in China jumped 3.1 percent in the January to February period from a year ago.
The Government Work Report prioritized “accelerating the cultivation of new growth drivers” and “expediting high-level technological self-reliance and strength” as the second and third key tasks, indicating that high-tech manufacturing investment is expected to continue its strong growth and may further rise this quarter, Wang said.
Editor: Martin Kadiev