China's domestic activity - back to investment-driven growth?

March 14, 2019

HONG KONG - Expansion in China's fixed asset investment (FAI) over the first two months of 2019 reflects the effects of supportive policy measures implemented in late 2018, according to a research note from ANZ Bank. 

Growth in China's property investment jumped significantly despite a deterioration in local developers' funding conditions, ANZ says. "We thus remain wary of near-term credit risks in the sector but are comfortable with the full-year property investment outlook."

Meanwhile, says ANZ, headline industrial production (IP) growth hit a decade-low of 5.3% y/y, with the manufacturing sector still in the doldrums.

"Overall, investment remains the key near-term driver to stabilise growth, as recently announced tax cuts have yet to feed through to the broader economy"