Rising fixed-asset investment to keep China on track to reach 2016 economic growth target

Data released by China's National Bureau of Statistics (NBS) on Monday showed that China’s fixed-asset investment increased 8.3 percent yoy in the January-October period.

China continues to rely on fiscal spending on infrastructure investment to bolster its economy after tightening rules on overheated housing markets and rising fixed-asset investment is likely to keep the nation on track to reach its economic growth target for 2016.

However, China’s economy will continue to face headwinds next year. While fears of a hard landing for China have eased this year, recent data have highlighted growing imbalances with growth increasingly dependent on government spending and ballooning debt as private investment hovers around record lows.

On Monday, China introduced a four-grade emergency plan that could mean "fiscal re-balancing" on rising concern over local government debt. The central government will not become involved in bailouts, while local government will be held accountable.

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