China's investment in factories soars 31.3%
(AP/chinadaily.com.cn)
Updated: 2006-07-20 16:03
China's investment in factories and other urban fixed assets soared by a
stunning 31.3 percent in the first six months of the year, the government said
Thursday, highlighting official worries that a building boom could ignite a
financial crisis.
The growth rate was even faster than last year's pace
of 27.1 percent in the same period, the National Statistics Bureau said,
suggesting that an increase in interest rates and other government efforts are
seeing much effects helping much in reining in the boom.
Chinese leaders have warned that a surge in lending for building projects
could ignite inflation, while banks could face financial problems if developers
of unneeded assets default on their loans.
Beijing has tried to block new construction by tightening lending rules and
banning some types of construction. But some officials are often reluctant to
enforce limits that might hurt local companies.
The government said Tuesday that overall economic growth surged to 11.3
percent in the second quarter, driven by the building boom.
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