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SHANGHAI-Investment in real estate development in Shanghai has dropped for the first time in 15 years, according to the Shanghai Municipal Bureau of Statistics. The city’s investment in real estate development reached yuan 45.33 billion ($5.67 billion) in the first five months of this year, a 0.2% fall over the same period last year. The proportion of investment in real estate development to the total fixed-asset investment dropped from 35.8% in the same period of last year to 32.9%.

China’s economy grew at an annual rate of 10.3% in the first quarter of the year, despite repeated vows by top leaders to slow growth to more sustainable rates. Government concerns about unprofitable spending on showcase and luxury housing projects prompted the Central Bank to raise the benchmark one-year lending rate by 27 basis points to 5.85 in April. Then last month the government issued new curbs on real estate lending and luxury property development. Now, there is speculation that the government might seek to curtail foreign investment in the country.

Jonathan Anderson, chief economist for Asia at UBS Securities Asia Ltd. in Hong Kong, noted in a recent report that, “We do expect both lending and fixed-asset investment to cool slightly going forward, but we don’t believe the authorities are interested in dragging down real economic activity.”

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