Reuters reported that China's capital spending was slightly lower than expected in October, consistent with weakness in a batch of data this week as Beijing battles to keep the world's fourth-largest economy from slowing too sharply.

The National Bureau of Statistics said that investment in urban areas in fixed assets such as roads and factories rose 27.2% in the first 10 months of 2008 as compared with the same period in 2007 down from 27.6% in the first 3 quarters. The rise was slightly below expectations, which centered on an increase of 27.5%.

Public works will receive a boost from the government's new CNY 4 trillion stimulus plan, but the jury is out on whether it will be enough to fill the gap left by a downturn in the property market and factory production, which together account for more than half of capital investment.

Mr Jun Ma chief economist for greater China with Deutsche Bank in Hong Kong said that "Next year we'll see a major deceleration of fixed-asset investment. He said that the government stimulus can offset part of the deceleration of developers and manufacturers, but it's unable to fully offset it."

The investment data followed a slew of indicators this week that pointed southward for the Chinese economy. Industrial output fizzled to its weakest pace in seven years, rising 8.2% in October 2008 from a year earlier. Import growth slowed and inflation fell to a 17 month low as domestic demand cooled. Sales of retail goods, from furniture to cosmetics, also deteriorated.

Mr Mu Hong VC of National Development & Reform Commission said that China faces a major challenge to keep its economy on track. He added that "You just mentioned that many people are worried about the Chinese economy. I'm also worried about it."