By Xu Zhaoyuan, Research Department of Industrial Economy, DRC

Research Report No.178, 2016 (Total 5061) 2016-12-16

Abstract: Investment is a factor that has the greatest economic fluctuations in the short term and determines economic performance to the largest extent. Just as decelerated growth of investment brings direct downward pressure to the economy, a stabilized growth of investment plays the leading role for macro-economic stability. Since 2012, China’s investment growth has rapidly declined from a high level. Yet since the third quarter of 2016, the growth rate of China’s total investment and private investment have respectively secured steady growth, and the drop of private investment in particular has been reversed since 2012 and started to rally up. In view of market demand and growth performance, out of total investment, the endogenous investment has basically bottomed out with limited margin for further decline and its present growth could remain stable. It is expected that in 2017, if investment in infrastructure and real estate sectors continues to decrease steadily and the downward pressure facing policy-backed investment is basically released, then the total investment can bottom out and in turn boost the economy to reach a sustainable mid-to-high growth.

Key words: macro-economy, fixed asset investment, bottom out, private investment