China's growth of fixed-assets investment remained high - up by 25.9 percent - in the first six months, but has shown obvious signs of a structural change, analysts said.

 

The growth rate was a drop of 3.9 percentage points over the same period last year but 2.2 percentage points higher than three months ago, Li Xiaochao, spokesman of the National Bureau of Statistics, said yesterday.

 

The growth remains quite high though it has dropped compared with last year, said Zhuang Jian, senior economist with the Asian Development Bank in Beijing.

 

"If investment doesn't slow down significantly, China will continue to face much pressure in meeting its environment, energy and resource consumption targets."

 

Many local places, such as the economically backward western provinces, have a strong appetite for investment, he told China Daily, as they want to catch up with their eastern counterparts.

 

The urban fixed-assets investment grew by 26.7 percent while the rural investment increased by 21.5 percent. The rural investment growth was 4.8 percentage points higher than the first quarter.

 

Industrywise, fixed-assets investment in the primary industry, basically agriculture, rose by 37.5 percent from January to June, much higher than in the first quarter's 20.3 percent.

 

"These are positive signs," Zhuang said. The structural change indicates China's recent emphasis on rural development is being implemented," he said.

 

China has vowed to build a new and prosperous countryside to rebalance the national economy.

 

The central and western regions registered a fixed-assets investment growth of 35.6 percent and 30.2 percent respectively in the first half, much higher than eastern regions, which achieved a growth of 22.3 percent.

 

To a large extent, the increase is due to the resource-related industrial shift from eastern regions, Zhu Baoliang, chief economist with the State Information Center, told China Daily.

 

"Many of those resource-related industries are highly capital-intensive, which, after their shift to the central and western regions, have pumped up local investment growth," he said.

 

Although this will help rebalance China's economic growth, which has seen the eastern regions growing faster and getting more prosperous, such strong growth in investment may trigger environmental concerns.

 

(China Daily July 20, 2007)