Private Investment Growth Surpasses 10% in 11 Out of 34 Chinese Provinces

Chinese fixed-asset and private investment levels appear on track to post robust growth for the first half of 2017.

Private investment hits double digits for 11 provinces

According to the latest data from China’s National Bureau of Statistics over 20 province-level entities have released their private investment data for the first half of 2017, with 11 posting growth of over 10% for the period, including Chongqing, Fujian, Guangdong, Guizhou, Hainan, Heilongjiang, Henan, Hunan, Jiangxi, Shanghai and Tianjin.

This preliminary data for private investment growth by province points to a nationwide increase of 7.2% for the first half of 2017.

Shaanxi and Qinghai managed to reverse an ongoing trend of negative growth in private, with Qinghai’s 2.2% year-on-year increase in private investment for the first half serving as its first positive reading since March this year.

“The reason for the re-warming of private investment is improving demand, lifting the willingness of private companies to make capital expenditures,” said Zhang Jun, chief economist of Morgan Shidan Lihuaxin Securities, to cnstock.com.

According to Zhang a series of central and local government policies for expediting private investment also played a role in the rebound, in particular efforts to push social financing to better serve the real economy that were launched in tandem with China’s financial deleveraging drive.

Increasing participation of private capital in public-private partnerships (PPP) has also contributed to accelerating private investment.

Tang Jianwei, chief macroeconomic analyst for the Bank of Communications Financial Research Center, said to cnstock.com that the rebound in private investment is related to improvements in the export environment which are benefiting the manufacturing sector.

When it comes to investment destinations, private capital is focusing in particular upon the manufacturing and real estate sectors, with investment in the tech sector also increasing.

The data by sector for Beijing exemplifies this trend, with real estate the leading sector for private investment, followed by telecommunications, software and IT in second place and manufacturing in third.

Western China leads fixed asset management growth

NBS data indicates China’s economically lagging western and central regions saw more rapid growth in fixed-asset investment in the first half than the affluent eastern coast.

Western and central regions saw growth of 10.7% and 10.1% respectively, as compared to 9.1%, while the north-east continued to see negative growth in investment with a year-on-year decline of 9.5%.

The three western provinces of Xinjiang, Guizhou and Tibet saw the most rapid growth in fixed-asset investment in the first half, all posting increases of over 20%.

Xinjiang saw a year-on-year increase in fixed-asset investment of 24.6% to reach 453.047 billion yuan, making it first in the nation for growth, as well as 16 percentage points ahead of the national average.

Liaoning and Gansu were the only two provinces to see negative growth in investment, posting year-on-year declines of 31.4% and 36.3% respectively.

Shandong province and Jiangsu province were the two provinces that were host to the largest volume of fixed-asset investment, with figures in excess of 2.4 trillion yuan each (approx. USD$360 billion).

A total of nine provinces were host to investment volumes in excess of 1 trillion yuan, including Anhui, Fujian, Guangdong, Henan, Hubei, Hunan, Sichuan and Zhejiang.

 

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