The nation's investment in fixed assets slowed in November, an
early sign the government's latest round of macro controls are
taking effect, according to analysts.
Fixed-assets investment in urban areas grew 26.8 percent
year-on-year in the first 11 months, compared with a rise of 26.9
percent to October, the National Bureau of Statistics said on
Friday. The statistics bureau didn't reveal figures for
November.
"A slowdown of investment growth in November shows that the
recent credit controls are starting to cool the economy," said Shen
Minggao, an economist with Citigroup in Beijing.
Converting the year-to-date data to monthly figures shows that
the growth of fixed-assets investment fell to 26.1 percent
year-on-year in November from 30.7 percent in October, Shen
said.
The government has taken measures to cool the economy in recent
months amid increasing concern about overheating and rising
consumer prices. The central government said it would rein in
investment, which accounted for 42.5 percent of the country's gross
domestic product in 2006.
The central bank has raised the interest rate five times and
increased the reserve requirement ratio for local banks 10 times
this year. Meanwhile, the central government has adopted strict
administrative measures to curb loan growth and approvals for
industrial land use, which analysts said was the biggest
contributor to the investment slowdown.
"Lending in the property sector and for new investment projects
accelerated sharply in November, confirming authorities' concern
about a possible rebound of investment in the next few months,"
said Wang Tao, an economist with Bank of America in Beijing.
Investment by State-owned companies grew 16.3 percent in the
first 11 months over a year earlier, while the growth was 16.6
percent to October, the statistics bureau said. But investment in
real estate and new projects has accelerated in the past month.
"Whether these administrative measures will be strictly carried
out early next year is still in question," said Wang. "Local
government may encourage investment after its reshuffle in the
first quarter next year."
Liu Mingkang, chairman of the China Banking Regulatory
Commission, said this week that the banking regulator would watch
for increased investment by local officials after the
reshuffle.
"The central government may continue to use a batch of policies
to cool the economy, such as further tightening of credit and money
supply, and control of investment project approvals through land
and environmental regulations," said Wang.
(China Daily December 15, 2007)
