Business

Wednesday March 11, 2009

China's fixed-asset investment up 26.5%


BEIJING (AP) - China's spending on factories and other fixed assets picked up in January and February as a government stimulus plan sparked a jump in investments by state companies, data showed Wednesday.

Investment rose 26.5 percent in January and February from the same two-month period of 2008, driven by a 35.6 percent increase in spending by state companies, the National Bureau of Statistics reported.

The overall growth was up from December's 21.9 percent and the full-year 2008 rate of 25.5 percent.

Chinese leaders have pointed to such spending and an increase in bank lending to finance it as signs their 4 trillion yuan ($586 billion) stimulus is taking effect.

The package is meant to reduce China's reliance on exports by boosting domestic consumption.

It relies heavily on investments by state companies, which together with local governments are due to provide nearly 75 percent of total spending.

Spending on projects backed by the central government rose 40.3 percent in January and February, the bureau said.

Data from those months often are reported as one period because the Lunar New Year holiday falls at varying points during that time each year, making direct month-to-month comparisons difficult.

Real estate investment rose just 1 percent, the bureau said, reflecting a glut of unsold properties amid the economic slowdown and Beijing's effort to discourage speculative spending on luxury apartments and villas.


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