Fixed asset investment jumped 24.5 percent year-on-year to 422.2
billion yuan (US$50.9 billion) during the first two months of 2005,
the National
Bureau of Statistics reported Wednesday.
The bureau did not give separate figures for January and
February.
The main drivers of growth were investment in coal mining (up
148.7 percent), oil refining (46.1 percent) and utilities (59.5
percent). Investment in the agricultural sector also leapt 69.9
percent in the two-month period.
Investment in ferrous metal smelting slipped 9.0 percent and
non-metal mining was down 7.7 percent.
Wang Zhao, a senior researcher with the State Council Development
Research Center, said investment growth for the first two
months was healthy. "It suggests the government's macro-control
measures are working," he said.
Peng Longyun, a senior economist with the Asian Development
Bank, said fixed asset investment was "on the way to becoming
reasonable." However, he pointed out that the January-February
growth rate was still high and based on relatively high figures in
the same period last year.
Fixed asset investment soared 53 percent year-on-year during the
first two months of last year, arousing worries about economic
overheating and prompting the government to implement a series of
cooling measures. The rate for the full year was 27.6 percent.
"It would be better if investment had declined another 1
percentage point for the first two months," Peng said. "A more
reasonable rate would be about 20 percent or slightly higher."
The growth figure for the first two months suggests the
government should not relax its macro-control measures this year.
It should continue to curb investment in areas such as steel and
cement, he said.
Peng forecasts China's first quarter gross domestic product to
grow 8.5 percent, although Wang believes it may hit 9.0
percent.
The National Development and Reform Commission (NDRC) said the
government would beef up coordination of its macro-economic
policies to prevent fixed asset investment from growing too fast
this year. The government will continue to tighten management on
land supply and credit, the commission told the annual session of
the National People's Congress earlier this month.
China is targeting fixed asset investment growth of 16 percent
for this year and GDP growth of 8 percent, according to the
NDRC.
(China Daily March 17, 2005)