December 04, 2008

Chinese fixed asset investments in 9 months up by 25.7% YoY

China’s National Bureau of Statistics announced recently that China's fixed assets investment rose to CNY 9,152.9 billion (USD 1,220.4 billion) in January to September 2007 up by 25.7% YoY from the same period in 2006.

Mr Li Xiaochao spokesman for NBS said that the increase was 1.6% points lower than the growth rate in the same period last year despite investment in fixed assets running at a high level.

Investment in urban areas reached CNY 7,824.7 billion up by 26.4% a drop of 1.8% points from the first three quarters of 2006; investment in rural areas was CNY 1,328.2 billion up by 21.2%. Of the total investment in urban areas, CNY 93.8 billion went into primary industry, up 41.1% secondary industry accounted for CNY 3,452.2 billion up by 29.3% and tertiary industry CNY 4,278.7 billion up by 24.0%. Investment in state owned and state holding enterprises was CNY 3,395.1 billion up by 16.2%. Investment in real estate was CNY 1,681.4 billion up by 30.3%.

Mr Song Guoqing a researcher with Peking University said that "The government increased the cost of investment to discourage the start of new projects. It put small and medium sized private enterprises under considerable pressure, but had little effect on large state-owned firms." Mr Song said fixed assets investment was influenced by wide ranging factors including government policies, enterprise development and international demand. The government needed to focus on avoiding repeated construction.

Premier Mr Wen Jiabao at a State Council executive meeting recently called for continued control of excessive fixed assets investment, especially in industries with high energy consumption and pollutant discharges and those with excessive capacity along with tightened supervision on credit granting by commercial banks.