Government to target economic overheating, inflation next year Capital spending in mainland urban areas slowed only slightly last month from the records reached earlier this year, despite moves to curb lending and new investments. Runaway investment in factories and property during the first 11 month of the year was beaten only by the record pace of the January to October period, boosting chances that Beijing will strengthen austerity measures. Urban fixed-asset investment rose 26.8 per cent to 10.06 trillion yuan for the first 11 months, down a touch from the 26.9 per cent gain in the first 10 months, the National Bureau of Statistics said yesterday. Separate figures for November were not given. Economists said the government's intensified efforts to curb bank lending and crackdown on polluting and inefficient industries appeared to have little impact. Mainland policy makers have been trying to cool over-investment amid fears excess production capacity will drive down profit margins and lead to snowballing bad debt at state banks. Beijing leaders last week signalled that they would shift to a 'tight' monetary policy next year, away from a decade-old stance of 'prudent'. The government also set the prevention of economic overheating and curbing inflation as priorities for 2008. Lehman Brothers economist Mingchun Sun said banks tended to cut short-term rather than long-term loans, which were mostly used to finance investment projects. He expected investment to remain strong since newly approved investment projects increased significantly in the third quarter of the year. Wang Tao, a Beijing-based economist with Bank of America, said tightening measures had more impact on projects controlled by the central government than those in the hands of local authorities. Investment in state-owned and state-controlled enterprises totalled 4.39 trillion yuan, up 16.3 per cent in the first 11 months, compared with a 16.6 per cent expansion in the first 10 months. Investment by the central government eased, expanding just 12.8 per cent year on year, compared with 13.8 per cent for the first 10 months. However, local government investment climbed 28.6 per cent, matching the figure for the first 10 months. Fixed-asset investment in property in the January to November period jumped 31.8 per cent year on year to reach 2.163 trillion yuan. 'Lending in the property sector and for new projects accelerated sharply in November, confirming authorities' concerns about a possible investment rebound over the next few months,' Ms Wang said. People's Bank of China governor Zhou Xiaochuan on Wednesday said a reshuffle of local government officials in 2008 could produce a repeat of 2003 when investment soared as new appointees sought to make their mark by boosting growth.