The growth of spending in Shanghai's fixed assets kept a steady momentum in the third quarter, according to data from the Shanghai Statistics Bureau yesterday.

But the growth balanced a drop in investment in the property development sector.

Urban fixed-asset investment rose 7.4 percent year on year in the nine months through September to 311.89 billion yuan (US$41.57 billion). The rate slowed by 0.3 percentage points from the first eight months to August.

"The situation can be summarized by a declining input in the property sector and strong spending in urban infrastructure construction, as well as a dynamic industrial sector," said Shen Shaohua, an analyst with the bureau.

Investment in property development reduced 3.6 percent compared with the same period last year to 96.66 billion yuan. Its proportion of total investment fell by 3.5 percentage points to 31 percent.

It was the third drop this year after the property sector slipped by 1.5 percent in July and slid 6.3 percent in August.

The outcome was no surprise after the government tightened rules for real estate developers to cool an overheated sector, including raising interest rates and raising the threshold for developers to borrow money from banks, analysts said.

Investment in urban infrastructure construction grew 33.3 percent year on year to reach 97.99 billion yuan. The spending was bolstered mainly by construction of traffic facilities, including building four Metro lines, the Hongqiao traffic hub and the expansion of Pudong International Airport.

Industrial investment rose 11.2 percent to 98.46 billion yuan in the period, with a comparatively faster growth in spending on steel and vehicle production.

Investment in the steel sector reached 19.13 billion yuan, surging 27.4 percent during the nine months, while spending in the auto sector jumped 17.6 percent to 5.18 billion yuan.

(Shanghai Daily October 23, 2007)