bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Cary Huang

Rate unlikely to slow because of surge in construction start-ups, economist warns

Urban fixed-asset investment in the first four months of the year grew 29.6 per cent year on year, well above the government's projection - increasing the likelihood of more measures to rein in mainland economic growth.

Fixed-asset investment in towns and cities rose to 1.8 trillion yuan between January and April, the National Bureau of Statistics said in a monthly report. It did not issue a separate figure for April. Investment grew 32.7 per cent in March.

Qu Hongbin,  chief China economist with HSBC, estimated urban fixed-asset investment grew 28.3 per cent in April, but warned 'these single-month numbers should be read with caution'.

Nobody could collect good month-by-month data on capital formation, he said.

First-quarter growth in urban fixed-asset investment was 29.8 per cent, the statistics bureau said.

Policymakers and economists said the robust growth in capital spending, helped by generous bank lending, was the main reason the gross domestic product grew at a faster-than-intended 10.2 per cent in the first quarter.

January-April investment by the central government grew 18.8 per cent year on year to 190.5 billion yuan, while that by local governments surged by 31.1 per cent to 1.61 trillion yuan, the bureau said in a report posted on its website.

The central government has projected urban fixed-asset investment will rise 18 per cent this year.

Fixed-asset investment last year was 8.86 trillion yuan, a rise of 25.7 per cent from the previous year.

Despite his doubts over some data, Mr Qu said the bureau's figures showed growth in urban fixed-asset investment was still higher than a few months ago and well above its 10-year average  rate of 15 per cent.

He   said the rate was unlikely to slow, given the 40 per cent surge in new construction start-ups in the first quarter. 'This is even more worrying considering the signs of excess capacity and wasteful construction projects,' he said.

He expects policymakers to continue stepping up efforts to mop up excess liquidity and cool  the market.

Hong Liang,  chief China economist with Goldman Sachs, said urban fixed-asset investment (FAI) in April had slowed. On a quarter-on-quarter, seasonally adjusted basis, it had slowed to 41.4 per cent year on year in April, from 48.7 per cent in March.

'We view the moderation of growth momentum in April FAI and industrial production as a positive development.

'However, we believe upside risks remain significant with loose financial conditions,' Ms Liang said in a research note.

The central government has recently stepped up measures to cool  the economic overheating following the faster-than-expected first-quarter growth.

Most economists expect the government to take further steps to curb runaway investment, probably by raising interest rates again or increasing bank reserve requirements. Three weeks ago the People's Bank of China raised its benchmark one-year lending rate by 27 basis points, to 5.85 per cent.

The statistics bureau said fixed-asset investment growth varied widely between sectors. Property claimed 21.3 per cent, transport 85.7 per cent, coal 58.2 per cent, oil and gas 3.7 per cent, power and heating production and supply sectors 15.6 per cent, and the steel, metal mining and processing sectors 13.1 per cent.



Fixed-asset investment in cities soars 29pc