China’s Factory, Real Estate Spending Surges 26.5%
China’s spending on factories and property surged 26.5 percent in the first two months of the year as the nation rolled out a 4 trillion yuan ($585 billon) stimulus package to revive growth in the world’s third-largest economy.
Fixed-asset investment in urban areas rose to 1.03 trillion yuan ($150 billion) from a year earlier, the statistics bureau said today. That was more than the 21.5 percent median estimate of 11 economists in a Bloomberg News survey.
Premier Wen Jiabao is planning a record fiscal deficit for 2009 and targeting at least 5 trillion yuan of new loans to fund a package that promised “fast and forceful” investment in infrastructure from pipelines to housing. A surge in lending in the first two months and recovering power consumption may signal the economy is reviving even as exports slump.
“Fixed-asset investment growth will start to pick up for a few months in response to the stimulus package,” said Xing Ziqiang, an economist at China International Capital Corp. in Beijing.
The yuan traded at 6.8396 against the dollar as of 10:13 a.m. in Shanghai from 6.8392 before the data was released.
Spending increased 24.3 percent in the same period last year. Separate figures aren’t released for January because of distortions associated with the Lunar New Year holiday.
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This article was originally posted on Bloomberg