China reports increase in fixed-asset investment
China's fixed-asset investment gained momentum for a third month in May as more power plants and railways were built to reduce blackouts and ease transport bottlenecks in
China.
Beijing-based National Statistics Institute said that
China's fixed-asset investment rose 26.4% year on year to RMB 1.97 trillion (around $238 billion) in the first five months of 2005. This is the highest increase this year and follows a 25.7% gain for the first four months.
Economists indicate that the pace of investment has halved after the government restricted lending to industries such as real estate, steel and cement. However, they added that the government does not need to tighten controls further because higher raw material costs and sliding prices for manufactured goods are preventing companies from spending more.
Investment in real estate saw an increase of 24% in the first five months to RMB 464 billion. This comes after a rise of 26% in the first four months and a jump of more than 30% last year. Investment in ferrous metals processing, which includes steel projects, increased 7.8% to RMB 70.2 billion.