China's investment boom to continue, says Nomura economist

It is one year since China launched its Rmb4 trillion $585 billion stimulus package, the country's attempt to stave off the effects of the financial crisis by massively increasing spending on infrastructure. There are worries in the market that if the private sector fails to recover quickly enough, the stimulus money will dry up, and so too will fixed asset investments FAI.

The market need not fear, said Mingchun Sun, Nomura's chief China economist, since the scope of the package has vastly exceeded expectations, triggering an investment boom that should last into the next few years.

This investment boom will be a significant milestone in China's economic development, said Sun at a press briefing...