China's Economic Recovery Drives Up Home Prices, Lures Capital
Oct. 15 (Bloomberg) -- China’s home prices rose at thefastest pace in a year in September and inflows of foreigndirect investment quickened as a recovery gathered pace in theworld’s third-biggest economy.
Home prices in 70 cities climbed 2.8 percent from a yearearlier, the National Bureau of Statistics said on its Web sitetoday. FDI jumped 18.9 percent to $7.9 billion, the Ministry ofCommerce said at a briefing in Beijing.
China may report next week that its economic growthaccelerated to 8.9 percent in the third quarter, a BloombergNews survey of economists shows. A record 8.67 trillion yuan($1.27 trillion) of new loans this year, reported by the centralbank yesterday, has added to the risk that the rebound is at thecost of asset bubbles, bad loans and resurgent inflation.
“There’s been a very impressive acceleration of growth,”said Dariusz Kowalczyk, chief investment strategist at SJSMarkets Ltd. in Hong Kong. “Policy makers will gradually beginto be more concerned about asset-price inflation and the overallinflation outlook.”
China may raise interest rates and banks’ reserverequirements in the first quarter of 2010, Kowalczyk said.
The Shanghai Composite Index rose 0.3 percent as of 1:06p.m. local time, taking this year’s gain to 63.8 percent.
Export Decline
Export declines slowed in September and the nation’sforeign-currency reserves swelled to a record $2.273 trillion,reports showed yesterday. China’s accelerating economic growthand expectations for the yuan to rise are encouraging investmentfrom abroad.
“Foreign investment may remain at a relatively high levelin the coming months as China’s recovery continues to lureinvestors,” said Lu Zhengwei, an economist at Industrial BankCo. in Shanghai.
FDI inflows started to rise in August after falling allyear. For the first nine months, direct investment from abroaddeclined 14.2 percent to $63.8 billion from a year earlier, thecommerce ministry said today.
In the house price data, the southern export hub ofShenzhen led the gains, with an 11.1 percent increase inSeptember from a year earlier.
Home sales jumped 73.4 percent in the first nine months of2009 from a year earlier to 2.75 trillion yuan, the statisticsbureau said. Investment in property development accelerated togrowth of 17.7 percent.
--Li Yanping, Paul Panckhurst, Chia-Peck Wong. Editors: PaulPanckhurst, John McCluskey.
To contact Bloomberg News staff for this story:Li Yanping in Beijing at +86-10-6649-7568 oryli16@bloomberg.net
Last Updated: October 15, 2009 01:17 EDTSource: Bloomberg
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