Investment and consumption, the two pillars of economic growth in Beijing, faces challenges in the post-Olympic period as a report predicts the growth of fixed-asset investment may shrink to 10 percent in the third quarter, down 14.8 percent from the first quarter.
The Beijing Economic Information Center (BEIC) with the Beijing Municipal Commission of Development and Reform (BMCDR) issued the report on Thursday. It analyzed finished Olympic projects in the first half and the government's restrictions on most projects within the city for environmental concerns during the August Games; the growth rate of fixed assets investment would drop to a low point in the next half.
BEIC statistics show the investment growth rate on fixed assets in June dropped to 14.9 percent, down 4.5 percent from the average in the first five months.
Challenge also remains in consumption capabilities with the city's high inflation rate. The consumer price index (CPI), the main gauge of inflation, grew more than 6 percent in the first half in the capital.
But Beijing's economic planners are thinking ahead.
The BMCDR's 2008-2010 Investment Analysis Report released on Tuesday said investment in real estate would become the major momentum of fixed-asset investment as more land was to be developed for commercial housing in the next three years in the city's new areas.
In addition, Beijing resident's rising disposable income would also help offset the deterring force on purchasing power. The total bank deposits of city residents had reached 1.05 trillion yuan ($154.2 billion) as of May, an average of 86,000 yuan each, according to the Beijing statistical bureau.
Consumption goods sales in Beijing reached 221 billion yuan in the first half, up 16.4 percent year-on-year excluding the inflation factor, the bureau said.