China's investment growth up in May, outlook still grim

BEIJING -- China's fixed asset investment recovered slightly in May due to improved manufacturing and property sectors, but economic slowdown continues, official data showed.

Investment expanded 9.9 percent year on year in May, up from 9.6 percent registered in April, data from the National Bureau of Statistics said on Thursday, marking rare rebound in growth amid the current lackluster economy.

The marginal improvement was attributable to robust investment in manufacturing and property, both of which saw faster growth than in previous months.

However, May's data were not sufficient to prove an overall recovery.

Investment in the first five months rose 11.4 percent from a year earlier to 17.12 trillion yuan ($2.8 trillion), retreating from the 12-percent level registered in the Jan.-April period this year.

The slowdown was mainly attributed to a serious drop in lending and fewer major construction projects due to the global economic climate, said NBS senior analyst Wang Baobin.

The Chinese economy expanded 7 percent year on year in the first quarter, down from 7.3 percent registered in the fourth quarter of 2014.

Slower growth in fixed-asset investment, which used to be a strong engine for China's fast economic growth, is seen as a key factor in slower GDP growth.

In response, policy makers have hastened fiscal spending to support faltering growth.

The top economic planner, the National Development and Reform Commission announced Wednesday it has approved seven new infrastructure projects including railways and airports worth more than 120 billion yuan.

Analysts expect more projects will be on the horizon and further easing measures are in the pipeline.

Further breaking down fixed asset investment in the Jan.-May period, primary industry saw investment grow the most rapidly at 27.8 percent year on year, while that in secondary industries slowed to 9.6 percent. Investment growth in tertiary industry dropped to 12.1 percent from the previous year, also lower than the Jan-April level.

The calculation does not include fixed-asset investment by farmers. It includes projects with investment of at least 5 million yuan, as well as all property development projects.