Analysis of Fixed Asset Investments in the First Half of 2007
Year:2007 ISSUE:31
COLUMN:SPECIAL REPORT
Click:312    DateTime:Nov.06,2007
Analysis of Fixed Asset Investments in the First Half of 2007   

By Dong Tao, China National Chemical Information Center

Fixed asset investment in China picked up mildly overall in the first half of 2007. growing 25.9% from January to June - 3.9 percentage points lower than the same period of 2006 and 2.2 percentage points higher than the first quarter of this year. It is expected that this trend will be maintained in the second half of this year. If the growth of fixed asset investment can be kept at 25%-28%, it will still be a relatively mild and stable growth.


  1  General status of the
investment in the petroleum
and chemical industry

Like investment in China generally, the growth of investment in the petroleum and chemical industry declined from the high level of the year 2006. According to statistics from the National Bureau of Statistics, the growth of investment actually completed maintained at more than 30% from June 2004 to June 2006. After June 2006 the growth of investment had a sustained reduction to the lowest of 17.86% during January - March 2007. During January - June 2007 the growth of the total investment picked up once again, being 9.85 percentage points higher than the level during January - March. The growth of actual investment in the period from January - December 2005 to January - March 2007 was slower.

Table 1  Investment and Growth in the Petroleum and
   Chemical Industry from January to June 2007
    (by industrial sector)                  
Sector                                                                                                           Investment planned    Growth    Investment actually completed    Growth
(RMB million)          (%)        (RMB million)               (%)                                                                              
Total of the petroleum and chemical industry
    1320687.40    21.74    272489.61    27.71
Chemical mineral mining and dressing
    8201.53     14.35    1601.96     70.15
Basic chemical raw materials manufacturing
    369330.34    27.08    54604.02    40.23
Chemical fertilizers manufacturing
    100785.33    17.44    23214.49    11.67
Chemical pesticides manufacturing
    18762.36    23.53    5480.58     33.36
Coatings, inks, pigments and similar products manufacturing
    36040.40    113.27    8189.97     66.25
Synthetic materials manufacturing
    77828.52    -22.06    15075.55    -0.44
Specialty chemicals manufacturing
    94656.42    56.93    27337.22    54.87
Rubber products manufacturing
    70733.16    29.62    19537.12    30.68
Oil refining and chemical production special equipment manufacturing
    5439.38     70.21    1889.48     68.22
Rubber processing special equipment manufacturing
    2514.58     242.89    513.99      107.84
Natural crude oil and natural gas exploration
    242214.60    -2.35    75939.23    13.19
Oil processing
    282839.46    44.53    34175.35    35.04
Oil drilling and exploration special equipment manufacturing
    11341.32    69.49    4930.65     130.2
Source: CNCIC

    Two peaks appeared in the growth of the number of projects under construction during the period from January - June 2004 to January - June 2007. They happened at January - March 2005 and at January - March 2006 and the growth was 20.12% and 36.68% respectively. Since the first quarter of 2006, however, the growth in the number of projects under construction has declined steadily. It hit a low of 16.41% in the first quarter of 2007. In spite of a pickup for the number of January - June, growth reached only 25.27% -  still lower than the peak of January - March 2006.
   The trend of projects newly launched was identical to that of projects under construction. Only the growth was bigger. The two peaks that appeared happened at January - March 2005 and at January - March 2006 and the growth was 36.64% and 39.85% respectively. Since the first quarter of 2006, however, the growth in the number of projects newly launched has declined steadily, with a low of - 5.94% in the first quarter of 2007. In spite of a pickup number of January - June, the growth reached only 19.42%, lower than the peak of January - March 2006.

Table 2  Number of Investment Projects and Growth
in the Petroleum and Chemical Industry from
January to June 2007 (by industrial sector)          
Sector                                                                                  Number      Growth      Number      Growth    Number      Growth
of projects    (%)     of projects     (%)     of projects        (%)
under construction&nb