Fixed asset investment up 24% in Q3
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Amid concerns over liquidity and inflation,the growth of China's fixed assets investment for the first nine months shows signs of slowing, according to data released by China's statistics authority Thursday.
Urban fixed assets investment grew 24.5 percent from a year earlier to 16.59 trillion yuan (US$2.5 trillion), while rural investment increased by 20.5 percent to 2.64 trillion yuan, said the National Bureau of Statistics (NBS) in a statement published on its website.
The country's total fixed assets investment rose 24 percent for the January-September period year on year to 19.22 trillion yuan, the NBS said.
The growth rate for urban investment slowed by 0.3 percentage points from that of the first eight months, according to the NBS, which does not provide figures for each month.
Growth rates in urban investment were down from figures for the first eight months, with the primary sector rate down from 18.6 percent to 17.7 percent, the secondary sector from 22.2 percent to 22 percent and tertiary industries from 27 percent to 26.7 percent.
The NBS figures also showed property development investment grew 36.4 percent to 3.35 trillion yuan from January to September, 0.3 percentage points down from the figure for the first eight months.
State-owned and state-controlled investment rose 19.5 percent to 6.86 trillion yuan in the first nine months from a year earlier, down by 0.5 percent points from the January-August period.
Over the same period, investment in central government projects rose 10.1 percent year on year to 1.29 trillion yuan, and investment in local government projects was up 25.9 percent to 15.3 trillion yuan, lower than 11.4 percent and 26.1 percent respectively for the first eight months.
Experts said the slowdown was expected.
"The authorities have been pressured to rein in liquidity and inflation and meet energy efficiency targets," said Wang Peng, a researcher at the China Center for International Economic Exchanges, a government think tank.
The NBS figures showed that almost 20 percent, or 3.16 trillion yuan, of the total urban investment comprised loans from Chinese banks, which extended a total of 6.3 trillion yuan from January to September.
At the start of this year, the government set a target of 7.5 trillion yuan in new loans, down from an unprecedented 9.59 trillion yuan last year that helped power the economy through the global economic downturn.
"New lending from January to September accounted for 84 percent of the full-year target, making it likely that the target will not be met, so the central bank might put forward more tightening measures," said Wang.
The People's Bank of China (PBOC), or the central bank, raised reserve requirements for six large commercial banks temporarily earlier this month, a move to drain cash from the economy, but avoid over-tightening.
The 50-basis-point increase, which takes required reserve ratios to 17.5 percent for the country's biggest lenders, was the fourth increase in the reserve ratio this year.
Wang attributed the government's efforts to battle inflation as another factor that would drag back investment growth.
As part of its efforts to ease the inflationary pressure, the PBOC announced Tuesday a quarter of a percentage point increase in the benchmark one-year interest rate on loans and deposits, the bank's first adjustment to interest rates since December 2008.
The NBS figures also showed that China's consumer price index (CPI), the country's main gauge of inflation, rose to a 23-month high of 3.6 percent in September, increasing the difficulty of meeting the country's 3-percent full-year inflation target.
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