China: Why infrastructure growth slowed?

ANZ analysts point out that China’s infrastructure investment growth has failed to accelerate quickly despite the government’s efforts to shore up infrastructure projects.

Key Quotes

“Tighter control over the approval of FAI projects, funding constraints, as well as a change in the reporting of FAI data explain part of the slowdown.”

“In the wake of recent government efforts, we expect infrastructure investment to pick up moderately in H2 to about 5-6% y/y from the current 4.1%, which will help lift overall FAI investment growth for full year 2019. However, China is unlikely to return to double-digit growth in the infrastructure sector in the near future.”