Investment Updates News
- New project investments shrink
Date: 30-Jan-2007 Sources: (Shenzhen Daily)
THE country saw less investment in new projects in 2006 than in 2005, government sources said yesterday, marking a sharp turnaround from the rapid expansion in such spending seen in the first few months of the year.
China carried out a slew of measures last year to rein in investment growth, including two interest rate rises and a strict review of new projects to ensure that they were in line with environmental, work safety and other standards. Officials with the National Bureau of Statistics told reporters that negative annual growth in spending on new projects in December was enough to push that for the whole year below zero. That growth stood at 3.7 percent in the first 11 months of 2006, down from a peak of 42 percent in the first quarter. Spending on new projects expanded 32.4 percent in 2005.
The negative full-year growth in spending on new projects compared with a 24 percent increase in overall investment. The statistics bureau usually provides detailed breakdowns of the monthly figures, but it has not yet done so for December or 2006.
The officials cautioned that China's economy could see a correction should investment in new projects continue to shrink, given its heavy reliance on fixed-asset investment for growth.
However, analysts said that the figures could be under-estimating investment in new projects, as local governments sought to avoid Central Government scrutiny by under-reporting the amount being spent in their jurisdictions.
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