SPENDING on China's urban fixed assets rose slightly faster last month, bolstered by investment in property and infrastructure construction, the National Bureau of Statistics said yesterday.
The unexpected expansion might be a side result of the financial turmoil in other markets and worries over a weaker global economic growth, which in part made investors leave more funds in China, said analysts.
Urban fixed-asset investment in the first ten months increased 26.9 percent from a year earlier to 8.9 trillion yuan (US$1.2 trillion). The jump was slightly faster than the 26.4-percent rise through September.
Spending on property development climbed 31.4 percent to 1.919 trillion yuan, accelerating further from the 30.3-percent increase through the third quarter.
The investment on construction of railways expanded 7.9 percent to 159 billion yuan, compared with the rise of 7.1 percent in the first nine months.
"The faster growth of FAI comes as a surprise amid the government policies to slow down export and investment, preventing an overheating economy," said Li Maoyu, an analyst with the Changjiang Securities Co Ltd.
"The growth may be boosted by investment diverted from other markets, such as the United States which is still stuck with the subprime mortgage financial crisis. It is natural for worried investors to look to fast-developing China as a haven."
The FAI rise reinforced the pressure on the central bank to raise interest rates. But the main push for tighter monetary policies still came from the rise in consumer prices, Li said.
The Consumer Price Index, the key gauge of inflation, posted a decade-high 6.5 percent growth in October, driven by uncurbed food costs.
To battle inflationary pressures, the central bank has raised interest rates five times and the bank reserve ratio nine times this year.
Many economists estimate at least one more interest-rate rise will be announced in the next two months to fend off the pressure of surging consumer prices.
The bureau said spending on non-metals mining and production grew 53.5 percent to 215.9 billion yuan.
Spending on coal exploration increased 24.2 percent to 125.8 billion yuan while investment in petroleum and natural gas production accelerated 12.3 percent to 144 billion yuan. Investment by domestic firms increased to 7.89 trillion yuan.