Investment still huge driver of economy: Experts

Investment will remain a major driver of China's economy as a result of the government's mini-stimulus, and experts forecast that capital-driven growth will continue to accelerate for the rest of the year as the economic outlook brightens.

As of the end of September, fixed-asset investment was up 20.2 percent year-on-year to 30.9 trillion yuan ($5.07 trillion), the National Bureau of Statistics said on Friday.

Investment-driven growth contributed 55.8 percent, or 4.3 percentage points, of the overall GDP expansion in the first three quarters, according to Sheng Laiyun, NBS spokesman.

"The investment cycle received a boost as the government launched its 'mini-stimulus', which partly involves higher rail investment. Help for exporters may also give manufacturing investment a boost," said Fred Gibson, an economist with Moody's Analytics.

Growth of investment in infrastructure outpaced the overall level, expanding 25.1 percent in the first three quarters to 4.8 trillion yuan.

Private investors put 19.6 trillion yuan into fixed-asset investment, almost twice as much as State-owned investors. Investments in the less-developed central and western provinces grew at a faster pace than those in the eastern coastal provinces.

Foreign-funded investment declined by 8.5 percent in the first three quarters.

The outlook for investment growth remains broadly positive. Moody's estimates that the monthly numbers will fluctuate around a mildly positive trend.

"Public infrastructure investment will lift the outlook over the coming months as growing demand for steel and processed goods lifts investment in those industries," Gibson said.

The clouds hovering over the near-term global outlook have cleared following the conclusion of the United States' spending impasse, which will boost demand for Chinese goods over the next two years.

Manufacturers will want to ensure that they have the capacity to deal with firming global demand, Gibson said.

"This will add some upside to manufacturing-related investment."

But, he added, Beijing's attempts to keep a lid on the property market will weigh on demand for materials and housing-related goods, posing some downside risks to the investment outlook.

In the first three quarters, property development investment grew 19.7 percent, down 0.6 percentage point from the first half of the year.

Property developers bought less land in terms of area during the period, while property inventories continued to mount.

But Tang Jianwei, a senior economist at Bank of Communications Co, said property development investment would pick up in the near future, as authorities have already lifted restrictions on developers' financing.

Together with a recovery in the manufacturing sector in the fourth quarter, Tang estimated that total fixed-asset investment growth will be 20.4 percent in the second half, against 20.1 percent in the first.

weitian@chinadaily.com.cn