China's fixed assets investment rose to 9,152.9 billion yuan (US$1,220.4 billion) in the first nine months, up 25.7 percent from the same period last year, the National Bureau of Statistics (NBS) announced on Thursday.
The increase was 1.6 percentage points lower than the growth rate in the same period last year despite investment in fixed assets running at a high level, said NBS spokesman Li Xiaochao.
At a State Council executive meeting on Wednesday, Premier Wen Jiabao called for continued control of excessive fixed-assets investment, especially in industries with high energy consumption and pollutant discharges and those with excessive capacity, along with tightened supervision on credit granting by commercial banks.
Investment in urban areas reached 7,824.7 billion yuan, up by 26.4 percent (24.8 percent in September), a drop of 1.8 percentage points from the first three quarters of 2006; investment in rural areas was 1,328.2 billion yuan, up by 21.2 percent.
Of the total investment in urban areas, 93.8 billion yuan went into primary industry, up 41.1 percent; secondary industry accounted for 3,452.2 billion yuan, up by 29.3 percent, and tertiary industry 4,278.7 billion yuan, up by 24.0 percent.
Investment in state-owned and state-holding enterprises was 3,395.1 billion yuan, up by 16.2 percent. Investment in real estate was 1,681.4 billion yuan, up by 30.3 percent.
In the first three quarters, 170,123 projects were begun, 18,151 more than in the same period last year. The planned investment in new projects was 6,030.9 billion yuan, up 24.2 percent.
"The government increased the cost of investment to discourage the start of new projects," said Song Guoqing, a researcher with Peking University. "It put small and medium-sized private enterprises under considerable pressure, but had little effect on large state-owned firms."
The central bank raised the benchmark one-year lending rate on five occasions this year to the present 7.29 percent. Meanwhile, the government has ordered lenders to keep more reserves, issued bonds to absorb cash and loosened control on capital flowing abroad.
Fixed assets investment was influenced by wide-ranging factors including government policies, enterprise development and international demand, said Song. The government needed to focus on avoiding repeated construction.
Zhu Zhixin, deputy director of the National Development and Reform Commission (NDRC), warned that the risks of an overheated economy remained, and preventing excessive rises in consumer prices should be a major macro-economic control priority.
The consumer price index, a main gauge of inflation, rose by 4.1 percent in the first nine months over the same period last year, according to the NBS.
(Xinhua News Agency October 25, 2007)
