Fixed-asset investment forecast to rise 25.3pc

Updated at 4.00pm:
China's overall fixed-asset investment, a key driver of economic growth, was expected to grow 25.3 per cent this year, state press said on Friday, citing government projections.

Urban fixed-asset investment is predicted to rise 27 per cent for this year, the State Information Center (SIC) said in a report published in the China Securities Journal.

Fixed-asset investment in the first nine months of the year increased 26.1 per cent over the same period in last year, with such spending, mainly by the government on infrastructure and other projects, accounting for just under half of China's total economic output.

The government think-tank expects overall fixed-asset investment to total 8.78 trillion yuan (HK$8.42 trillion) this year, with urban fixed-asset investment to reach 7.45 trillion yuan, the newspaper said.

The SIC said overall fixed-asset investment was expected to grow 20 per cent to 10.5 trillion yuan in next year, with urban fixed-asset investment at 9.08 trillion yuan, up 22 per cent over this year.

The think-tank projections appeared to reflect an easing in government efforts to cool the economy.

In March, the government had targeted a 16 per cent annual growth in fixed-asset investment for this year after setting a similar target in last year.

Last year fixed-asset investment in China rose by 25.8 per cent over 2003.

The real-estate sector continued to benefit from robust investment during this year, with the rate of increase projected to be 21.5 per cent to 1.59 trillion yuan, then rising 20.5 per cent to 1.9 trillion yuan in next year, the SIC said.