CHINA / National

Fixed-asset spending rises
(Shanghai Daily)
Updated: 2006-07-05 10:06

China's investment in factories, bridges and other fixed assets jumped 30.3 percent to 2.54 trillion yuan (US$318 million) in the first five months of this year, blasting ahead of the government's full-year target of 18 percent growth.

"The blistering figures indicate that earlier state efforts to rein in excess investment aren't yet taking hold," the macroeconomic research team at the National Development and Reform Commission said in a report published yesterday in the state-run China Securities Journal.

"Unless more aggressive curbs are introduced, it's not likely that the investment growth will slow down in the second half of the year."

The team called for stronger moves such as raising reserve requirements for banks and imposing special taxes on investment in overheated sectors.

The added investment occurred despite the fact that the central bank raised the benchmark rate for one-year loans by 0.27 percentage points to 5.85 percent in April in a bid to cool rapid economic growth and restrict lending.

The increase was the first since October 2004 when the central bank raised the lending rate by the same amount.

Over the weekend, the World Bank confirmed earlier reports that China had leaped ahead of Britain and France to become the world's fourth-largest economy.

The bank's latest calculations showed that China's economy totaled US$2.26-trillion in 2005, outpacing Britain by US$94 million.

The United States remains the world's biggest economy, followed by Japan and Germany, the World Bank reported on its Website. Britain now ranks No. 5 and France is No. 6.

China's gross domestic product expanded 9.9 percent in 2005 to 18.2 trillion yuan.

In December, the country leapfrogged Italy to No.6 on the global list after revising its 2004 GDP by 16.8 percent up to 15.99 trillion yuan as the result of a national financial census.

The census - the first of its kind in China - surveyed all private and state-owned companies in the manufacturing and service sectors, generating more comprehensive data than the previous annual GDP calculations, which were based on samples.


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