High-tech sectors lead the rebound of investments in China

Fitch Ratings-Shanghai-16 May 2021: Fitch Ratings expects China’s high-technology sectors to see strong fixed-asset investment (FAI) growth amid the nation’s strategic goal to upgrade the industrial structure, spur innovation, and boost self-sufficiency for technology products.

China’s fast recovery from the pandemic and promotion of industries with high value-add has driven strong 37.3% growth in FAI in the high-tech sectors in 1Q21. This pace is equivalent to a CAGR of 9.9% since 1Q19, outperforming the total FAI growth of 25.6% yoy in 1Q21 and CAGR of 2.9% since 1Q19.

The high-tech manufacturing sector, in particular, saw robust FAI growth of 41.6% yoy in 1Q21, led by investments in medical instruments, computer and office equipment, and pharmaceutical products manufacturing, likely due to strong global demand and China’s earlier resumption of manufacturing activities than other countries. The high-tech service sector also saw strong FAI growth of 28.6% yoy, driven by investments in testing, R&D and design, information, and e-commerce services. Fitch Ratings