CHINA / National

China's economy grows 8.5 percent
Updated: 2006-04-14 07:15

China's sizzling economic growth slowed to an estimated 8.5 percent in the first three months of this year and will gradually slow to 7.5 percent by the end of the year, a government report said Thursday.

Chinese men look at domestic brand cars at a car dealership in Nanjing, capital of east China's Jiangsu province, April 12, 2006. [Reuters]

Government controls on spending and lending for real estate and some industrial projects are likely to bring growth to below 8 percent, said the report by the government's main planning agency, published in the newspaper China Securities News.

China's gross domestic product rose 9.9 percent in 2005, as strong export demand and investment growth foiled efforts to bring growth down to what officials say would be a more manageable level.

The report by the National Development and Reform Commission's investment research institute said that spending on construction and factory equipment, a measure known as "fixed-asset investment," rose 26.4 percent in the first quarter compared with the same period a year earlier.

Fixed-asset investment is expected to slow to 25.4 percent for the year, it said. It rose 25.7 percent in 2005.

Official figures for first quarter growth are due to be announced by the National Bureau of Statistics next week.

The estimates for 2006 are still above those set out in the five-year blueprint for economic policy issued last month.

That plan calls for economic growth to end at 7.5 percent for the year, with fixed-asset investment rising only 18 percent.

However, officials have said those targets will surely be overrun because of excess spending in certain sectors, such as steel and aluminum.