The government is to strengthen the management of all new
investment projects and will pull the plug on any that do not have
appropriate approval.
Analysts said the measure is designed to stop the economy from
overheating.
According to a document published yesterday by the State Council
on its website, all new projects must be properly authorized and
abide by land use, energy efficiency, market access and
environmental protection criteria.
Relevant departments must establish records for investment
projects valued at more than 50 million yuan ($6.7 million) and
submit all relevant information to upper-level governments, the
document said.
In addition, from the start of next year, detailed information
on all such projects must be made available to the public via the
Internet, it said.
Projects found to be breaking the guidelines will be halted
immediately and offenders punished, it said.
The document said there have been too many new investment
projects in recent years, some of which have failed to follow
relevant laws and regulations. Coupled with loose management and
poor law enforcement, these have led to excessively fast investment
growth and too much duplication.
The government has been increasingly concerned with the speed at
which the economy has been growing, with figures for the first
three quarters showing year-on-year growth of 11.5 percent.
It has said it must prevent the "relatively fast" economic
growth from worsening and becoming overheated.
The central bank has raised the interest rate five times this
year and commercial banks' reserve requirement ratio - the
proportion of money they must hold in reserve - nine times.
Inflation remains one of the government's key concerns,
following consumer price index growth of 6.5 percent in October,
matching the decade-high figure reported in August.
Adding to policymakers' concerns, urban fixed-asset investment
rose 26.9 percent year-on-year in the January to October period, up
from 26.4 percent in the first nine months, according to official
figures.
Although the authorities did not reveal how fast fixed-asset
investment grew in October, it could be as much as 30 percent - an
acknowledged danger line - analysts have said.
Chen Jijun, senior analyst with Beijing-based CITIC Securities,
said: "I think there will be further tightening measures to rein in
the fast-expanding economy, especially in the real estate
sector."
There might not be a blanket tightening, which could spark a
slump in investment, but it will be industry-specific, he told
China Daily.
Those that consume large amounts of energy, for example, might
be dealt the hardest blow by the regulators, he said.
Goldman Sachs (Asia) forecast in its latest research note there
will be two more 27-basis-point interest rate hikes by the end of
the year, and lowered its real GDP growth forecast for next year to
10.3 percent.
(China Daily November 22, 2007)
