China's investment in fixed-assets was growing too quickly but it was too soon to say if an interest-rate increase was needed to cool the economy, Li Ruogu, vice governor of the central bank, said Wednesday.

The growth of fixed-asset investment had reached 30 percent this year, the Financial Times cited Li as saying.

The country’s annual growth in fixed-asset investment over the past 26 years averaged 18.6 percent, so the central bank “would rather see a more sustainable rate of maybe around 20 percent,” Li said.

China’s investment in fixed assets such as property, infrastructure and factories increased 29 percent in the third quarter of this year, but urban investment growth slowed to 26.4 percent after reaching 27.9 percent in September, he noted.

The central bank was also “happy” to see a slowdown in M2, the broad measure of money supply growth, the vice governor added.

M2 grew 13.5 percent in October from the year-earlier period, marking the slowest growth in three years and well off the central bank’s full-year target of about 17 percent.

Li said it was not yet clear if another rate hike was needed after the central bank raised rates for the first time in nearly a decade in October.

“Whether we need further steps or further action depends on the situation in the next few months,” he said.

(Xinhua News Agency November 25, 2004)