Risk of overheating rejected
The recent surge in investment in the country shows no signs of tailing off but there is no danger of the economy overheating, an official from the National Bureau of Statistics has said.
Ji Fengxiang, director of the Department of Statistics on Investment in Fixed Assets, made the comment as he revealed that the mainland last year experienced the highest growth in fixed-asset investment since 1994.
Total investment grew by 26.7 per cent and amounted to 5.5 trillion yuan. Mr Ji said the growth was an expected outcome of the government's fiscal policy. He expected the nation's consumer spending and investment climate would continue to improve.
Mr Ji's comments, published yesterday by the Beijing-based Economic Observer, come with both domestic and foreign direct investment continuing to hit record levels, triggering speculation that a downturn might be on the horizon.
In January, the Ministry of Commerce said foreign direct investment (FDI) for last year rose to US$53 billion. In 2002, China became the world's top FDI recipient, with more tan US$52.7 billion. Mr Ji remained confident that investment levels would continue to rise, because of the government's recent spending of 800 billion yuan on basic infrastructure projects, using funds raised largely with treasury bonds.
While that enlarged the central government's budget deficit, Mr Ji said the expenditure led to a rise in consumer spending and investment. The report cited the positive impact on the vehicle industry from increased urban consumer spending.
