Chinese Target 20-25 % Expansion in Infrastructure Investment

April 29 (EIRNS) - Chinese investment in fixed assets, primarily infrastructure, could grow by some 25% in 2007, senior National Development and Reform Commission's Investment Research Institute official Zhang Hanya was quoted as telling a Beijing financial conference April 29. "Despite the government's strengthened controls over local projects, fixed-asset investment may continue to grow at around 25 percent," Zhang said. "The government wouldn't like to see investment expansion fall below 20% and economic growth shrink to lower than 8% such as around 1998, when the economy was slumping, and the government faced great difficulty in boosting domestic demand and easing unemployment," Zhang was quoted by Bloomberg.

Infrastructure construction and other areas of the economy which need more investment, will be funded by the government, but spending will be limited elsewhere. There is more than 6 trillion yuan ($778 billion) in deposits in Chinese banks, and China has sufficient fuel, electricity and transportation, as well as growing profits of industrial companies, to support infrastructure investment, Zhang said. At the same time the government has tightened controls over lending in areas such as real estate.