According to the NBS figures, 565.8 billion yuan (US$70.7 billion) was invested in the real estate sector in the first five months, up 21.8 per cent from the same period a year ago.

The rosy economy and increasing consumption of energy also drove up investment in sectors like coal-mining, power and railway transportation, which grew by 63.9 per cent, 18.4 per cent and 93.8 per cent.

Gao Shanwen, chief economist at Everbright Securities, said the strong rebound in investment and lending growth this year had stimulated the economy and the stock market, and had led to a re-evaluation of asset prices.

Most new investment went into infrastructure construction, real estate, exploitation of resources, catering and commerce. That might help improve the profitability of relevant industries, Gao said.

However, as for whether the central bank would further raise interest rates this year to cool down the economy, most economists agreed it would have to wait for macro economic figures in June before taking action.

Insiders said the central bank had issued more than 100 billion yuan (US$12.5 billion) in central bank bills to specific commercial banks, following a similar move a month ago.

This is expected to decrease banks' liquidity and so force them to reduce lending.

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