China's investment growth may fall to below 20 percent in the first half of this year, raising the possibility 2012 could see the country register its lowest growth in a decade.

A survey of 23 institutional analysts by Wind Information found most predicted the fixed-assets investment growth figures, which will be out on July 13, may continue to slow to about 19.9 percent in the first half after the rate was reported at 20.1 percent at the end of May.

But the analysts said growth may pick up in the second half of the year as incentives kick in.

According to the predictions, investment growth throughout the whole year will be 19.4 percent, which will be the slowest pace since 2002, when a rate of 18.3 percent was recorded. Since then, investment growth has never been lower than 20 percent.

The National Development and Reform Commission, China's top planning agency, has sped up the approval for large projects in May in a bid to reverse the economic downturn via investment, which is still the country's main engine of growth.

However, Xie Yaxuan, an analyst with China Merchant Securities, said investment growth in June could continue to weaken as it will take a while for the NDRC's move to play its role.

Xie said if authorities continue to impose tightening measures on the property market, investment in real estate will continue to retreat.

"Although investment in infrastructure has warmed up, it is not enough to offset the depression in the real estate sector," Xie said.

Chinese developers have invested 2.2 trillion yuan ($346 billion) in real estate development in the first five months of this year, 18.5 percent up from the same period in 2011. A report by Haitong Securities estimated the growth rate will be lowered to 18.2 percent when the data for the first half is released.

Chen Dongqi, deputy head of the NDRC's Macroeconomic Research Institute, said investment growth may decline from June.

"Except for affordable housing projects, investment growth faces many difficulties or even recession in other sectors such as manufacturing," he said.

Meanwhile, slower investment growth was also partly the reason behind the easing of the producer price index, which will bring down the nominal prices of investment, said Peng Wensheng, chief economist of China International Capital Corp.

However, Gao Yuan, compiler of the Haitong report, said the negative impact on real estate investment is nearing its end, as more incentives are underway.

"The investment growth is expected to stop declining and slightly rebound in the third quarter of this year," Gao said.

Some experts expressed concerns over the over-correction of the incentives.

Yao Jingyuan, a researcher with the Councilor's Office of the State Council, said if investment growth picks up too quickly, it will damage the country's effort to adjust its economic structure.

"The key issue in China is to eliminate the out-dated production to optimize the economic structure. If we issue policies to protect these sectors just to withstand the crisis, we'll soon find ourselves trapped in the old issues again," Yao said.

Li Daokui, director of the Center for China in the World Economy at Tsinghua University, said measures to restore growth should be in line with the goal of adjusting economic structure.

"We should encourage consumption-oriented projects for public benefits, such as water conservancy projects," Li said.

weitian@chinadaily.com.cn