China's investment growth, a force buoying the country's rapid economic development, remained in high gear in October despite a moderate slow-down.

But the growth of real estate investment, also a closely watched figure, is also on the rise.

Nationwide fixed asset investment grew by 29.5 percent on a year-on-year basis during the January-October period, the National Bureau of Statistics said yesterday.

This compared to 29.9 percent during the first nine months, indicating that the rate for October alone was around 25 percent, still quite a high figure.

China's gross domestic product (GDP) grew by 9.5 percent in the first three quarters of this year, which economists say they believe is too fast.

In 2002, China's GDP rose by 8 percent - a more sustainable rate - while fixed asset investment rose 16 percent.

Led by booming investment in the real estate sector, investments in many sectors rocketed during the first quarter of this year.

Fixed asset investment rose a superheated 47.8 percent during that period, which prompted the central government to take cooling-down measures.

New investment in steel, aluminum and cement was banned and converting farmland for industrial use was also restricted.

Those measures brought fixed asset investment growth rate down to 31 percent for the first six months.

However, many analysts say the key underlying reason for rapid investment growth - the red-hot property sector - still provides incentive for fast growth because low interest rates encourage both developers and homebuyers to invest money.

After months of deliberation, the People's Bank of China raised the interest rate for the first time in nine years late last month. But its effects on investment growth still need time to go to work.

At the end of October this year, investment growth in the real estate sector was still high.

The National Bureau of Statistics said it climbed by 28.9 percent during the first 10 months.

The rate is 0.6 percentage points higher than the figure for the first nine months.

(China Daily November 18, 2004)