Chinareinsineconomicexpansion

China‘sgrowthinfixed－assetinvestmentanditsmoneysupplyslowedconsiderablyinAugust，providingfirmevidencethatthegovernment‘‘stighteningmeasureswerereininginthecountry‘‘srapideconomicexpansion。

Urbanfixed－assetinvestmentinAugustrose21。5percentcomparedwithayearago，amarkedslowdownfromthe30。5percentexpansionfromJanuarythroughJulyandtheslowestforasinglemonthsinceDecember2004。M2，thebroadindicatorformoneysupply，rose17。9percentlastmonthcomparedwith18。4percentinJulyandJune。

China‘seconomyhasbeengrowingatarecordpace，expandingby11。3percentinthesecondquarter。Beijingofficialsandmanyeconomistsareconcernedthatsuchgrowthratesarenotsustainableinthelongerterm。

Thelatesteconomicdata，whichwerereleasedbyQiuXiaohua，commissionerofChina‘sNationalBureauofStatistics，suggestBeijinghasbeenabletocontrolexcessivelendingandinvestmenttosectorssuchasrealestatethatareespeciallyatriskofoverheating。

Beijingisusingacombinationofmonetaryandadministrativecontrolsinitsattemptstomoderategrowth。SincelateApril，China‘scentralbankhastwiceraisedbenchmarklendingratesandbankreserverequirements。YesterdayitalsomoppeduparecordRmb225bninitsregularopenmarketoperations。

SuNing，thedeputycentralbankgovernor，saidthisweekataninternationalconferenceinBeijingthatthecountry‘smoneysupplywasslowingdramaticallyasaresultofthesemeasures。

Atthesametime，China‘sleadersaretryingtocontrolunnecessaryproduction－forinstancebylimitinglandrightsandenforcingenvironmentalstandardsinkeyindustriessuchassteel，cementandautomobiles。

Beijingisalsoworriedaboutoverlendingtourbanpropertyprojects，includingresidences，officesandindustrialparks，andthethreatitcouldleadtoartificiallyhighpricesandexcesssupply。

Whiletryingtotempercreditandinvestmentgrowth，Beijingisalsoattemptingtostimulateconsumerspending，sinceitbelievesastrongmiddleclasswillbeakeydriveroffuturegrowth。

China‘sstatisticsbodysaidAugustretailsaleswereup13。8percent，arateconsistentwiththatoftheprevioustwomonths。Demandforoilproducts，jewellery，automobilesandbuildinghasbeenparticularlystrong。