China reported Thursday a 30-percent- strong year-on-year growth of urban fixed asset investment in the first five months of 2006, following the State Council's warning to "firmly curb" the trend.

The total fixed asset investment in urban areas amounted to 2,544.3 billion yuan (318 billion U.S. dollars) during the January-May period, growing 30.3 percent from the same period a year ago, the National Bureau of Statistics (NBS) said Thursday.

The statistics release came a day after the State Council, China's cabinet, called for efforts to curb the fast growth in fixed asset investment at its executive meeting.

The meeting chaired by Premier Wen Jiabao urged all departments concerned to "strictly" control the approval of new construction projects,reduce land supplies and cut back bank lending.

"The investment is definitely overheating instead of cooling down as hoped," said Wang Xiaoguang, an economist with the National Development and Reform Commission.

Banks' impulse to lend and local governments' need to maintain speedy economic growth are major factors causing the soaring investment, Wang told Xinhua.

Figures released by the central bank showed that China's new loans totaled 2.12 trillion yuan (264 billion US dollars) in the first five months of the year, approaching the annual target of 2.5 trillion yuan.

During the same five months, the investment by local governments surged by 31.3 percent year on year to 2,272.6 billion yuan, up 0.2 percentage points over the first four months, according to the NBS figures.

Meanwhile, investment by the central government also accelerated. The growth rate climbed from 18.8 percent from the January-April period to 22.7 percent in the January-May period, reaching 271.8 billion yuan.

The NBS report also said that investments in coal mining industry, power industry and railway transport grew 63.9 percent, 18.4 percent and 93.8 percent respectively. The investment in ferrous metal and non-ferrous metal went up 13.7 percent and 34.0 percent respectively.

The investment by mainland enterprises rose 31.6 percent while those by Hong Kong, Macao and Taiwan-based companies and foreign companies grew 16.0 percent and 22.4 percent year on year.

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