China’s Private Firms and Manufacturers are Investing Again

(Bloomberg) — China’s manufacturers and private businesses ramped up investment in August, buoying sentiment hit by the U.S. trade war and a historic economic slump.

Manufacturing investment posted the first gain since the virus outbreak, rising 5% from a year earlier, according to calculations by Nomura Holdings Inc. based on statistics bureau data. Investment by privately-owned firms was also positive in August, jumping 15.1%, Nomura’s data showed.

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Improving Capex

Meanwhile, investment led by the state, a key driver of China’s recovery following the pandemic, has moderated. The growth of infrastructure investment decelerated for a third month in August, and investment by state-owned enterprises fell, according to Nomura. Its Chief China Economist Lu Ting said he expects infrastructure investment to rise notably in coming months due to strong government bond sales.

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Moderating Pace

The data adds to other signs that investment sentiment in the country has improved in recent months. A credit indicator that captures demand deposits by households and businesses had the fastest growth in two-and-a-half years last month, indicating companies have more money on hand and are planning investment.

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China’s demand deposits had the fastest growth in two-and-a-half years

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