China investment pace eases but economy stays strong

By Alan Wheatley and Langi Chiang

BEIJING (Reuters) - Chinese investment in fixed assets such as property and factories slowed slightly in April but not by enough to alter the picture of a sturdy economy that is holding up well in the face of stiffening global headwinds.

Spending on fixed assets in urban areas rose 25.7 percent in the first four months from a year earlier, compared with a 25.9 percent increase in the first quarter, the National Bureau of Statistics said on Thursday.

Although the reading was a touch below market forecasts of a 26.2 percent rise, there were fewer working days this April than in April 2007 because of changes to China's schedule of public holidays.

"It seems that significant momentum is being sustained in the Chinese economy despite all the global uncertainties," said David Cohen with Action Economics in Singapore.

"China remains a key engine of growth for the world economy."

The bureau did not issue data for April alone, but Goldman Sachs economists calculated that investment in the month was up 25.3 percent from a year earlier, against 27.3 percent in March.

"We believe the underlying growth momentum of fixed-asset investment has been robust," Yu Song and Hong Liang told clients.

Policy makers have been trying to prevent over-investment, fearing an ample supply of easy money could fuel wasteful spending that might saddle banks with new bad loans.