BEIJING: China’s fixed asset investment, an important gauge of infrastructure spending, rose 9.6 percent in the first five months of the year, government statistics showed Monday, as investment growth slowed in the world’s second-largest economy.
The moderation comes after a record credit binge in the first quarter of the year, a splurge aimed at stimulating the slowing economy.
China’s economy, a key driver of global economic expansion, grew just 6.9 percent in 2015, the weakest rate in a quarter of a century.
The fixed asset investment results fell far short of economists’ median forecast of 10.4 percent in a survey by Bloomberg News and was the slowest pace of expansion since 2000, the company said.
But factory production and consumer spending showed steady growth for the period, the government data showed, as industrial output rose 6.0 percent year-on-year in May, matching the figure for April, while retail sales were up 10.0 percent year-on-year in May.
“The national economy extended a stabilizing and progressing trend that emerged since the start of the year with positive factors accumulating,” said Sheng Laiyun, spokesman for the National Bureau of Statistics.
“But we must be aware that the international environment remains complicated and severe, the painful domestic structural adjustments continue, and the economy is still under downward pressure.”
Private investment growth also slowed, with a 3.9 percent increase in the first five months of the year.
“The slowdown in private investment growth indeed showed the intrinsic driver of China’s economic growth is yet to be strengthened,” said Sheng.
He blamed the weakening on factors including the difficulty for private firms to get loans, industrial overcapacity, and limited access for private firms to some sectors.
“At this moment the growth momentum is stable,” Larry Hu, head of China economics at Macquarie Securities, told Bloomberg News.
“This is comfortable for policy makers and will give them more time to focus on supply-side reforms.”
A note from ANZ Research said the figures suggested that China may miss its growth target of 6.5 to 7 percent in the second quarter and may lead authorities to use more aggressive fiscal policies such as faster approval of infra-structure projects.
Steel output rose 1.8 percent on-year in May, the data showed, as US and European steelmakers accused bloated Chinese firms of dumping excess production on foreign markets.
As part of a program aimed at moderating its economic slowdown, Beijing has listed reducing overcapacity and ex-cess inventory and cutting down borrowing as top priorities, with the country’s ailing steel industry a key target.
But foreign governments say they have seen little movement towards implementing its promises to tackle the problem.