The bureau did not give separate figures for January and February.

The main drivers of growth were investment in coal mining (up 148.7 percent), oil refining (46.1 percent) and utilities (59.5 percent). Investment in the agricultural sector also leapt 69.9 percent in the two-month period.

Investment in ferrous metal smelting slipped 9.0 percent and non-metal mining was down 7.7 percent.

Wang Zhao, a senior researcher with the State Council Development Research Center, said investment growth for the first two months was healthy. "It suggests the government's macro-control measures are working," he said.

Peng Longyun, a senior economist with the Asian Development Bank, said fixed asset investment was "on the way to becoming reasonable." However, he pointed out that the January-February growth rate was still high and based on relatively high figures in the same period last year.

Fixed asset investment soared 53 percent year-on-year during the first two months of last year, arousing worries about economic overheating and prompting the government to implement a series of cooling measures. The rate for the full year was 27.6 percent.

"It would be better if investment had declined another 1 percentage point for the first two months," Peng said. "A more reasonable rate would be about 20 percent or slightly higher."

The growth figure for the first two months suggests the government should not relax its macro-control measures this year. It should continue to curb investment in areas such as steel and cement, he said.

Peng forecasts China's first quarter gross domestic product to grow 8.5 percent, although Wang believes it may hit 9.0 percent.

The National Development and Reform Commission (NDRC) said the government would beef up coordination of its macro-economic policies to prevent fixed asset investment from growing too fast this year. The government will continue to tighten management on land supply and credit, the commission told the annual session of the National People's Congress earlier this month.

China is targeting fixed asset investment growth of 16 percent for this year and GDP growth of 8 percent, according to the NDRC.

(China Daily March 17, 2005)