Capital spending up 25.5%

Spending on roads, real estate and urban factories between January and April jumped 25.5% over a year earlier, the South China Morning Post reported. Total urban fixed asset investment (FAI) totaled US$290 billion, according to figures from the National Bureau of Statistics. The growth for April was slightly higher than the 25.3% recorded in the first quarter. FAI jumped 24.5% throughout 2006. Huge amounts of liquidity in the banking system are driving the growth in investment and has hurt government efforts to slow down the economy. On Wednesday, Premier Wen Jiabao pledged to solve the biggest problems facing the economy, including international payment imbalances, fast growth in foreign exchange reserves and excessive liquidity.