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Almost all kinds of investment projects in China including those of steel, aluminum and cement production as well as office building, golf course, urban railway, exhibition center and shopping mall construction are undergoing a nationwide check-up and many may be halted this year.
The State Council, the Chinese central government, recently issued a circular requiring all localities and departments to kick off examinations of most investment projects in fixed assets under construction or to be built.
Those projects banned by national policies or conflicting with laws and regulations on land management should be halted, whereas those not in compliance with environmental protection norms, urban construction blueprints, approval procedures or loan policies should be suspended, according to the circular released by the General Office of the State Council.
All projects that started in 2004 excluding some agricultural, ecological educational, health and science projects should be checked, the circular said, stressing that projects of over-investment and low-level repeated construction with consumption of huge energy, water, materials and great pollution should be firmly stopped.
No new projects of steel, aluminum and cement would be approved this year, the circular said, acknowledging that some projects in agricultural, ecological, infrastructure and social fields would still be supported.
The fixed assets investment rose 26.7 percent in 2003 from the previous year and the growth rate of the steel, aluminum and cement industries almost doubled, official figures showed.
Early this year, the Communist Party of China (CPC) and the government sent clear signals to take concrete actions to appropriately control the scale of investment in fixed assets and firmly halt haphazard investment and low-level, redundant construction in a number of industries and regions.
The Political Bureau of the CPC Central Committee has called for great attention to some new problems in the country's national economy, especially the excessive investment in fixed assets and the shortages of coal, power, oil supplies and transportation facilities.
"Guided by market forces, the government will use a comprehensive range of substantial measures, mainly economic and legal means supplemented by any necessary administrative measures, to strengthen guidance and control," Premier Wen Jiabao said in the annual government work report in March.
However, China's fixed asset investment still reached 879.9 billion yuan (US$106 billion) in the first quarter this year, up 43 percent over the same period last year, according to latest figures from the National Bureau of Statistics.
The investment in real estate development grew 41.1 percent year on year in the first quarter, according to the statistics.
The Chinese government has made up its mind to take decisive measures to curb the overheating economy. Just before the issuance of the circular, the , the central bank, already posted a plan to raise commercial banks' reserve requirement at the central bank to 7.5 percent from seven percent beginning April 25, in a move to clamp down on fast growth of money supply and credit which is posing challenges for a healthy economic growth.
(Xinhua News Agency April 30, 2004)
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