Center

Investment shows signs of recovery

(China Daily)
Updated: 2007-03-23 14:36

But there are also signs that the currently strong growth in investment could eventually slow down.

On the one hand, the growth of the producer price index (PPI) slowed to 2.6 percent in February, lower than theconsumer price index's 2.7 percent for the first time in three years. Historically, a falling PPI usually heralds a slower investment growth.

On the other hand, by the end of February, the number of new construction starts decreased by 15 percent, and the aggregate sum of planned investment shrank by 35.8 percent.

The previously relatively low level of fixed-asset investment growth was cyclical, said Li Huiyong, an analyst at Shenyin & Wanguo Securities.

The current investment boom started at the end of 2003 and is entering its final phase, added Li.