Efforts To Cool Chinese Economy Having Limited Impact

Investment in real estate dips in July, but still in "hot" range.

BEIJING (AP) - The growth rate of investment in Chinese real estate and other urban assets slowed slightly in July but still was high amid efforts to cool off a construction boom, the government said Wednesday.

Urban fixed asset investment grew by 30.5 percent in the first seven months of the year, down 0.8 percentage points from the figure for the first half of the year, the official Xinhua News Agency reported, citing the National Statistics Bureau.

It didn't give a monthly figure for July, but said growth is ''still in the 'hot' range.''

''The sharp rise in fixed asset investment is potentially a risk for China, which is trying to reorient its economy in a more efficient and environmentally friendly direction,'' Xinhua said.

The government has tried to rein in what it says is dangerously fast growth in investment in factories and other fixed assets by raising interest rates, tightening bank credit and imposing curbs on new building projects.

The government has warned that excessive investment could ignite inflation or cause a financial crisis by leaving companies and banks with dangerously high debt that they are unable to repay.

A report Tuesday by the World Bank said its expects China to have a growth rate of 10.4 percent and that the country faces potential risks from heavy investment in real estate and credit growth. But it said the country's overall outlook is positive, due to strong economic growth and low inflation.

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