China's investment growth, a force buoying the country's rapid
economic development, remained in high gear in October despite a
moderate slow-down.
But the growth of real estate investment, also a closely watched
figure, is also on the rise.
Nationwide fixed asset investment grew by 29.5 percent on a
year-on-year basis during the January-October period, the National
Bureau of Statistics (NBS) said
Wednesday.
This compared to 29.9 percent during the first nine months,
indicating that the rate for October alone was around 25 percent,
still quite a high figure.
China's gross domestic product (GDP) grew by 9.5 percent in the
first three quarters of this year, which economists say they
believe is too fast.
In 2002, China's GDP rose by 8 percent -- a more sustainable
rate -- while fixed asset investment rose 16 percent.
Led by booming investment in the real estate sector, investments
in many sectors rocketed during the first quarter of this year.
Fixed asset investment rose a superheated 47.8 percent during
that period, which prompted the central government to take
cooling-down measures.
New investment in steel, aluminum and cement was banned and
converting farmland for industrial use was also restricted.
Those measures brought fixed asset investment growth rate down
to 31 percent for the first six months.
However, many analysts say the key underlying reason for rapid
investment growth -- the red-hot property sector -- still provides
incentive for fast growth because low interest rates encourage both
developers and homebuyers to invest money.
After months of deliberation, the People's Bank of
China raised the interest rate for the first time in nine
years late last month. But its effects on investment growth still
need time to go to work.
At the end of October this year, investment growth in the real
estate sector was still high.
The NBS said it climbed by 28.9 percent during the first 10
months.
The rate is 0.6 percentage points higher than the figure for the
first nine months.
(China Daily November 18, 2004)