- The value of fixed-asset investment projects approved in China more than quadrupled in the September quarter compared to the levels seen in the three months to June.
- The government recently announced income tax cuts designed to support household consumption.
- China’s economy grew by 6.5% in the year to September, the weakest pace since the GFC.
The value of fixed-asset investment projects approved in China more than quadrupled in the September quarter compared to the levels seen in the three months to June, indicating the government is now actively moving to mitigate the threat posed by a mounting trade war with the United States and volatility in financial markets.
According to calculations from Reuters based on official data released on Wednesday, China’s state planner approved 45 projects worth 437.4 billion yuan between July to September, up from 90.5 billion yuan in the June quarter this year.
The September amount accounted for nearly two-thirds of the value of approvals so far this year.
Fixed assets are physical installations designed to last more than one year.
“Those projects mainly focused on the technology, energy, agriculture and transport sectors, said Meng Wei, a spokeswoman for the National Development and Reform Commission (NDRC) during news conference in Beijing.
The steep lift in approved projects follows the release of data last week that revealed China’s economy grew by 6.5% in the year to September, the weakest pace since the GFC.
Fixed asset investment grew in urban areas by 5.4% in the first nine months of the year compared to the same period a year earlier, an acceleration on the annual increase of 5.3% seen between January to August.
“Investment is very weak by historical standards,” said Vivek Dhar, Mining and Energy Analyst at the Commonwealth Bank, in response to the latest figures.
However, based on the value of new projects approved last quarter, that trend may soon start to reverse.
On top of boosting investment, Chinese policymakers have also announced a raft of measures to support household consumption in recent days, including income tax cuts and additional tax deductions.
There’s more at Reuters here.
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