China Jan-July Fixed-Asset Investment Slowed Below Estimates

--NBS Blames Slowdown on Impact of Hot Weather, Flooding

     BEIJING (MNI) - Fixed-asset investment growth in China was weaker than

expected in the first seven months of the year, softening from the growth rate

during January to June period. 

     Fixed-asset investment totaled CNY33.74 billion in the January-July period,

up 8.3% from the year-earlier period, the lowest growth rate since the

January-December 2016 period when it recorded an increase of 8.1%, according to

data released by the National Bureau of Statistics on Monday. The growth rate

was lower than the gain of 8.6% for the first six months of 2017, also lower

than expectations for an 8.6% increase in a Market News survey of 19 economists.

     Fixed-asset investment rose 0.61% in July on a monthly basis, lower than

the rise of 0.91% in June.

     "The slowdown was mainly due to hot weather and flood disasters that

happened in certain areas," NBS spokesman Mao Shengyong said at a press

conference on Monday.

     The main sub-indicators mostly showed a softening growth trend.

     Investment in the agriculture sector grew 14.4% year-on-year in the first

seven months, down 2.1 percentage points from that in the first six month, the

NBS said.

     Industrial sector investment grew 3.9% y/y, 0.7 percentage point lower than

that from January to June. Within the industrial sector, investment in

manufacturing grew 4.8% y/y in the first seven months, compared with 5.5% growth

in the January-June period. 

     Mining sector investment continued to shrink, falling 6.1% on an annualized

basis, but this was still an improvement over the 6.4% fall during the first six

months. Investment growth in the oil and gas exploration sector rose 6.8%, up

from an increase of 6.4% from January to June. 

     Investment in the services sector grew 11.3% in the first seven months, an

unchanged growth rate compared to the first half of the year, the NBS said.

     Infrastructure investment growth inched down to 20.9% year-on-year from

21.1% y/y growth in the January-June period. 

     "Although the data were below market expectations, they were still better

than the same period last year, indicating the economy is still comparatively

stable," Zhang Yiping, an analyst with China Merchants Securities, told MNI.

"The previous good performance caused the market to be overly optimistic about

the July data," Zhang added. 

     Fixed-asset investment in the January to July period of 2016 grew 8.1% y/y,

0.2 percentage point lower than that this year. 

     In the first seven months this year, private investment, a main contributor

to overall growth, also slowed, decelerating to a 6.9% rate from 7.2% in January

to June. Private sector investment accounted for 60.7% of total fixed-asset

investment during the first seven months of the year.

     "As corporate profits continue to improve, fix-asset investment will remain

stable in the second half of this year," the NBS Mao said. 

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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