Investment in urban fixed assets soars 31.3 pct
(AP)
Updated: 2006-07-20 14:51
China's investment in factories and other urban fixed assets soared by a
stunning 31.3 percent in the first six months of the year, the government said
Thursday, highlighting official worries that a building boom could ignite a
financial crisis.
The growth rate was even faster than last year's
pace of 27.1 percent in the same period, the National Statistics
Bureau said.
Chinese leaders have warned that a surge in lending for building projects
could ignite inflation, while banks could face financial problems if developers
of unneeded assets default on their loans.
Beijing has tried to block new construction by tightening lending rules and
banning some types of construction. But officials are often reluctant to enforce
limits that might hurt local companies.
The government said Tuesday that overall economic growth surged to 11.3
percent in the second quarter, driven by the building boom.
Economists expect China to respond by raising interest rates again and
possibly allowing a rise in the value of its currency, the yuan, in an effort to
cool off growth.
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