China: Back to investment-driven growth? - ANZ

Betty Wang, analyst at ANZ, suggests that for the Chinese economy, the expansion in fixed asset investment (FAI) over the first two months of 2019 reflects the effects of supportive policy measures implemented in late 2018. 

Key Quotes

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

“Meanwhile, the 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.”