(Bloomberg.com)
Updated: 2007-04-17 11:42

Factories, Real Estate

Urban investment in factories and real estate probably climbed 23 percent in the first three months from a year earlier, the survey showed. A National Development and Reform Commission statement today indicated the jump was 25.3 percent. That compares with 13.8 percent in December and 24.5 percent for all of last year.

A flood of cash from overseas sales raises the risk of asset bubbles and bad loans. Exports surged 27.8 percent in the first quarter and pushed the trade surplus to $46.4 billion. The stock market rose to records and had the biggest one-day fall in a decade. Banks made 1.4 trillion yuan of new loans, nearly half the total for 2006.

The central bank raised interest rates once in the quarter and has ordered banks to set aside more money as reserves three times this year to curb lending and investment.

"China's growth has shown clear signs of rebounding in the first two months, mainly on stronger growth in credit, investment and exports," said Qu Hongbin, an economist at HSBC Holdings Plc in Hong Kong. "This raises the question of whether Beijing will slam on the brakes."

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