Fixed-asset investment expands 27.2pc

Updated at 1.30pm:
China's main measure of investment in construction, factory equipment and other fixed assets rose 27.2 per cent in October from a year earlier, the government said on Wednesday, a lower pace of growth than expected.

Urban fixed asset investment is China's main benchmark for spending on property development, construction and capital goods and is viewed as an indicator for future growth.

Authorities have sought to curb investment in some sectors, such as cement, steel and aluminium production, warning that excess spending on redundant construction projects and factory capacity could lead to financial problems. At the same time, they have encouraged investment in the energy sector to help meet shortages of electricity and coal.

The October figure compared with a 29.4 per cent year on year increase in September. Forecasts for October had been above 29 per cent.

Fixed-asset spending rose 27.6 per cent year on year in the first 10 months of the year to 5.58 trillion yuan (HK$5.4 trillion), the National Bureau of Statistics reported.

The biggest share went to domestic projects, where investment rose 29.3 per cent over a year earlier to 4.9 trillion yuan, it said.

The fastest growth in spending was in coal mining, up 76.3 per cent year on year. Investment in electricity and other utilities rose 33 per cent, spending on oil and natural gas exploration and development climbed 31 per cent and investment in railways jumped 44 per cent, the report said.

Although growth in such investments has slowed from a peak annual rate of 53 per cent early last year, China's central bank warned in its latest quarterly monetary policy report that investment growth was still "likely to rebound". Preventing such a rebound would be a policy priority for the rest of the year, it said.