China's economy grew at an annual rate of 10.3% in the firstquarter of the year, despite repeated vows by top leaders to slowgrowth to more sustainable rates. Government concerns aboutunprofitable spending on showcase and luxury housing projectsprompted the Central Bank to raise the benchmark one-year lendingrate by 27 basis points to 5.85 in April. Then last month thegovernment issued new curbs on real estate lending and luxuryproperty development. Now, there is speculation that the governmentmight seek to curtail foreign investment in the country.

Jonathan Anderson, chief economist for Asia at UBS SecuritiesAsia Ltd. in Hong Kong, noted in a recent report that, "We doexpect both lending and fixed-asset investment to cool slightlygoing forward, but we don't believe the authorities are interestedin dragging down real economic activity."