China's fixed asset investment up 24.8% in 2007
Updated: 2008-01-24 10:17
The sizzling investment growth was achieved despite the government's cooling measures. China's central bank last year raised the deposit reserve requirement ratio ten times and the benchmark interest rate six times in a bid to curb loan growth.
However, the central bank said earlier this month that the growth of renminbi loans began to slow down in the last two months of 2007, thanks to the tightening measures.
Correspondingly, the urban fixed-asset investment figure for December alone was 19.6 percent, which had helped bring the annual figure down from 26.8 percent for the first 11 months.
Xie also commented on the effect of the country's macro control measures citing a declining trend of investment growth in the second half.
Investment growth for the third quarter was 25.3 percent, down 1.6 percentage points from the second quarter, and for the fourth quarter 23 percent, down 2.3 percentage points from the previous three months, according to Xie.
However, he also noted that "investment in the real estate sector continued to grow rapidly".
It scored a growth of 30.2 percent in 2007, up 8.4 percentage points from a year earlier, Xie said. Total investment in the sector was 2.5 trillion yuan.
Wang Xiaoguang, a senior economist with the research institute under the National Development and Reform Commission, said he believed that the impressive growth in real estate spending reflected, at least in part, rising government spending on low-income housing.
He said real estate developers should have restrained their investment in the second half following a series of tightening measures to cool the property market, including new housing loan policies to check the purchase of a second apartment in addition to repeated interest rate rises.
As part of its tight monetary policy, the central bank raised the reserve requirement ratio for commercial banks to a record 15 percent last week, up from 14.5 percent, the first such move in 2008.
The central bank said the move aimed to draw back the excess liquidity on the market and control the possible bounce of the suppressed bank loans.
CASS's Wang believed spending on investment could be expected to slow down a bit this year, as the country had listed the preventing of the national economy from overheating as one of its top macroeconomic priorities in 2008.
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