China's efforts to curb blind expansion in some industries are starting to
pay off, but fixed-asset investment growth remains too rapid, the country's top
economic planning official said in remarks published on Monday.
Ma Kai, head of the National Development and Reform Commission, said curbing
the launch of new investment projects remained the main focus of the broad array
of macro-control measures that Beijing is deploying.
In a speech made on Friday and posted on the agency's Web site, Ma said the
economy was in good shape but the country faced some striking problems:
fixed-asset investment and credit were still expanding too fast, while the trade
surplus was too large.
"The government has taken a series of timely macro-economic measures and
these measures have initially helped contain the momentum of blind expansion in
some industries, but the problem of overcapacity has yet to be fundamentally
resolved," Ma said.
Excess capacity in sectors such as steel, alumina, coking and autos showed no
let-up, while risks remained for overinvestment in other industries including
coal, power and textiles, he said.
Fearful that overcapacity could wipe out profits and deluge banks with new
bad loans, the government has taken a raft of measures to cool some fast-growing
sectors.
Investment growth slowed in August, but Ma said the authorities needed to
keep tight controls on bank credit and land supply while implementing tougher
environmental and safety standards.
"The top priority of macro-economic policy is to strictly control the launch
of new projects," Ma said.
Toward that end, the central government has dispatched six inspection teams
to the provinces to spearhead a drive launched in early August to scrutinise new
projects, he said.
Half of all new coking industry investments flouted government rules, Ma
said. The figure for coal was 42 percent, for cement 35 percent, for electricity
and steel 26 percent and for textiles 22 percent, he added.
(For more biz stories, please visit Industry Updates)
