China’s economic growth looks to continue into 2021, but infrastructure boom nearing its peak, analysts say

Overall growth of fixed-asset investment accelerated to 2.6 per cent in the first 11 months of the year, up from 1.8 per cent in the January-October period.

Compared with October, the growth rates of property and infrastructure investment lost steam in November

3-MIN READ3-MIN

Construction crews work on the Meizhou Bay cross-sea bridge this month in China’s Fujian province. Photo: Xinhua

Published: 9:27pm, 15 Dec 2020Updated: 11:40pm, 15 Dec 2020

A series of massive infrastructure construction projects have begun across China in the final months of the year, as the country’s building boom continues to boost economic growth in the fourth quarter and looks to continue doing so into 2021.

However, the momentum of the country’s infrastructure and property building boom appears to be approaching its peak after Beijing turned to this traditional growth driver to help power the economy’s recovery from the damage caused by the coronavirus pandemic, according to analysts.

Chinese government data released on Tuesday shows that infrastructure investment rose 1 per cent from a year earlier in the January-November period, accelerating by 0.3 percentage points from the growth rate in first 10 months of the year, while the growth of property development investment accelerated to 6.8 per cent from 6.3 per cent.

That helped the overall growth of fixed-asset investment accelerate to 2.6 per cent in the first 11 months of the year, up from 1.8 per cent in the January-October period.

Also in November, relative to a year earlier, retail sales grew by 5 per cent, while industrial production grew by 7 per cent. The nation’s surveyed jobless rate also stood at 5.2 per cent in November, down from 5.3 per cent in October.

The strong bounceback in investment was unsurprising, given a surge in the growth of construction equipment sales last month.

Sales of excavators soared to 32,236 units in November, up 66.9 per cent from a year earlier, according to figures from the China Construction Machinery Association. In addition, sales of heavy trucks increased 33.5 per cent in November from a year earlier, according to data from the China Association of Automobile Manufacturers.