China Asset Investment Keeps Rising

Fri Dec 14, 2007 12:16 PM EST

SHANGHAI — China's investments in factories, real estate and other urban assets surged 26.8 percent in the first 11 months of this year despite government curbs meant to prevent runaway spending, according to data reported Friday.

Total investment in such fixed urban assets during the period was 10.1 trillion yuan ($1.4 trillion), the National Bureau of Statistics reported.

Monthly figures for November were not immediately released.

Beijing worries that rising spending on factories, real estate and other projects could ignite a debt crisis if a glut of unneeded projects leads to widespread defaults on bank loans.

The January-November increase compares with a 26.9 percent increase in the first 10 months of the year, suggesting little change despite repeated interest rate hikes, reserve ratio increases and administrative decrees against increased lending for such projects.

Investment in real estate actually accelerated in November, with an increase of 31.8 percent over the year earlier to 2.16 trillion yuan ($293 billion). The increase in January-October was 31.4 percent.

Such trends are helping drive rising property prices that along with soaring food costs are raising worries over politically sensitive inflation.

China's inflation benchmark rose 6.9 percent in November compared to the same month last year, the biggest rise since 1996. Officials blamed food and fuel price increases.

Housing prices in 70 major Chinese cities jumped by 10.5 percent in November over a year earlier, the official Xinhua News Agency said Friday, citing the National Development and Reform Commission, the government's main economic planning agency.

The increase was the biggest monthly rise since the government began keeping track of that data in July 2005, it cited the NDRC's pricing director, Cao Changqing, as saying.

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replytoj001

China is going through the growing pains of economic expansion.

As China grows into the global market they will have to become globally acountable to international standards. The Olympics wil push China further into the global village.

It will take a bit for this to happen, but it wil happen.

Recent articles have shown an increase in a Chinese middle class.

A political upheaveal, "growth pains" will occur, watch closely.....the people of China want more freedoms, it will be interesting to see how the government will react......last time it did not work out so well for those that desired freedom.

Much more to follow

replytoj001

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#1 - Sat Dec 15, 2007 10:12 PM EST

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China Asset Investment Keeps Rising

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