Beijing would introduce further measures to cool the economy in addition to the one-year lending rate rise announced by the central bank on Thursday, leading economists said yesterday. Morgan Stanley managing director and chief economist Stephen Roach said the rate increase alone would not be enough to rein in growth. 'I think it's the first step,' Mr Roach said. 'There are signs from Beijing that there will be additional follow-up measures either through administrative controls on projects or industry-specific restrictions on lending, and possible further actions by the [central bank].' Mr Roach said investment in fixed assets in urban areas was too high. The Chinese Academy of Social Sciences warned this week that fixed-asset investment could reach the equivalent of 52.7 per cent of gross domestic product this year. Investment in fixed assets, such as roads and factory equipment, grew by 25.7 per cent last year to 8.86 trillion yuan - the equivalent of 48.5 per cent of GDP. The People's Bank of China lifted its benchmark one-year lending rate by 27 basis points to 5.85 per cent on Thursday. The first rate increase since October 2004 was part of a series of credit-tightening measures implemented over the past week to curb explosive economic growth. Mr Roach said he believed the measures would help temper growth from a year-on-year rate of 10.2 per cent in the first quarter to around 8 per cent to 8.5 per cent by the end of the year. Under the 11th Five-Year Programme, China's goal for GDP growth is an average of 7.5 per cent until 2010. Investment bank Goldman Sachs said in a research report yesterday that 'policy tightening has begun to unfold sooner than expected'. But the analysts responsible for the research stressed the tightening was warranted because financial conditions were looser than on the eve of the 2004 tightening. 'We expect more market- and domestic-demand-friendly policy adjustments this time. Exchange rate adjustment holds the key to achieving these objectives,' they wrote. Mr Roach said he expected export growth would slow down because of 'a growing tide of protectionism in the US and Europe'. He said, with hindsight, China could have stayed longer with the previous round of macroeconomic measures, but 'there were concerns of destabilising effects to China's workers and economy'.