SteelOrbis Shanghai
In the first two months of the year, the urban fixed assets investment totaled RMB 529.4 billion ($65.85 billion), up 26.6 percent over the same period of last year.
Fixed-asset investment in the property sector for the January-February period was RMB 143.6 billion ($17.86 billion), up 19.7 percent year on year. Investment in the coal sector rose 27.3 percent to RMB 3.9 billion ($485.07 million), in the oil and natural gas industry rose 21.4 percent to RMB 10.8 billion ($1.34 billion), in the power and heat generation and transmission sectors rose 14.0 percent to RMB 54.2 billion ($6.74 billion), in the steel, metal mining and processing sector increased 1.6 percent to RMB 16.2 billion ($2.01 billion).
In spite of the high growth rate of urban fixed assets investment, investment in iron and steel industry witnessed a considerable fall. However, it takes some time to see whether this shows that the
production expansion slows down or not. The sharp increase in growth rate of investment in railway transportation is in compliance with the requirements in the policy to develop the
construction of railway during the 11th Five Year period. According to the 11th Five Year Program,
China will establish a 17,000 kilometer long railway, with a total investment of more than RMB 1.25 trillion ($155.5 billion). The planned investment for 2006 tops RMB 225 billion ($28 billion).
As the fixed assets investment still maintains a rapid grow, it would not be true to say that
China's iron and steel industry has overcapacity.