Saving Private FAI

Contrary to the reported sharp deceleration in China’s broad private investment in 2016 and 2017 to date, investment undertaken by purely private enterprises is still strong but moderating, growing 10.5% in Jan-Feb 2017 relative to 13.9% in 2015. A one-time data reclassification produced weaker growth for FAI undertaken by other privately-controlled enterprises, and stronger growth in broad state FAI in 2016. Private investment growth in 2017 will depend heavily upon credit conditions, which are tightening due to rising money market rates.

Posted August 1, 2017
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