As the Chinese economy slows, its fixed-asset investment has also weakened, and analysts said it may not pick up in the near term despite the potentially favorable fiscal policies the country has vowed to adopt.
The ongoing global financial turmoil will dampen China's export-related fixed-asset investment, analysts said.
Nominal fixed-asset investment growth in urban areas was 27.4 percent year-on-year in the January-August period, up from 26.7 percent in the same period last year. But deducting the factor of the rapidly rising producer price index (PPI), which gauges ex-factory prices, real growth in fixed-asset investment has slumped.
PPI rose 10.1 percent, an all-time high, in August, meaning the real rate of fixed-asset investment growth could be around 15 percent, analysts said. In August 2007, however, the country's PPI rose by only 2.6 percent.
The Chinese Academy of Social Sciences (CASS) forecast in a book published on Sunday that the country's nominal overall fixed-asset investment growth could be 24 percent for the whole of this year, or about 15 percent in real terms. Last year, real growth exceeded 20 percent.
Moreover, analysts said the slowdown in the global and Chinese economies, coupled with falling prices, may have made people anticipate a "deflationary" cycle.
As the Chinese economy slows, its fixed-asset investment has also weakened, and analysts said it may not pick up in the near term despite the potentially favorable fiscal policies the country has vowed to adopt.
The ongoing global financial turmoil will dampen China's export-related fixed-asset investment, analysts said.
Nominal fixed-asset investment growth in urban areas was 27.4 percent year-on-year in the January-August period, up from 26.7 percent in the same period last year. But deducting the factor of the rapidly rising producer price index (PPI), which gauges ex-factory prices, real growth in fixed-asset investment has slumped.
PPI rose 10.1 percent, an all-time high, in August, meaning the real rate of fixed-asset investment growth could be around 15 percent, analysts said. In August 2007, however, the country's PPI rose by only 2.6 percent.
The Chinese Academy of Social Sciences (CASS) forecast in a book published on Sunday that the country's nominal overall fixed-asset investment growth could be 24 percent for the whole of this year, or about 15 percent in real terms. Last year, real growth exceeded 20 percent.
Moreover, analysts said the slowdown in the global and Chinese economies, coupled with falling prices, may have made people anticipate a "deflationary" cycle.
(China Daily October 15, 2008)
