BIZCHINA / Center
Investment cools slightly in 2006
By Zhi Ming (China Daily)
Updated: 2007-01-26 08:58
Fixed asset investment increased by 24 percent year-on-year last year,
two percentage points less than a year earlier.
Investment growth has slowed in recent years as the authorities have
introduced measures to keep the economy from coming to a boil.
Urban fixed asset investment grew at a year-on-year pace of 24.5 percent,
2.7 percentage points less than a year earlier. The slowing trend was
especially obvious last month, when the rate was 13.8 percent.
Overall investment in fixed assets like property and infrastructure grew
by 29.8 percent in the first half of last year. The figure was 25.7
percent in 2005 and 26.4 percent in 2004.
Xie Fuzhan, director of the National Bureau of Statistics (NBS),
attributed the slower pace to the tightening measures the government had
put in place to rein in areas like real estate investment, lending and
market entry.
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"The structure of investment has also improved," he said, adding that
investment in some industries suffering from over-capacity had also
slowed.
However, the large amount of excess liquidity in the economy has also put
pressure on investment growth. Xie said it remains a serious problem for
Chinese economy.
China's broad measure of the money supply, or M2, which reflects the
overall state of money supply in the country, grew by 16.9 percent year
on year last year, which was slightly less than the 2005 level.
Considering the huge amount of money already in the market in 2005,
however, the growth rate was still impressive, analysts said.
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