China calls on local authorities to curb projects, put brakes on investment
06.18.2006, 10:20 PM
SHANGHAI (XFN-ASIA) - The Chinese government has called for regional government agencies to strictly control new projects to curb the excessive growth in fixed-asset investment, state media reported.
'If the current trend continues, it will tend to exacerbate the oversupply problem in certain industries, lead to more financial risk and cause additional pressure on the environment,' the official China Securities Journal reported, citing a circular issued by the State Council.
It added that will affect the adjustment of the economic structure.
Official figures showed that urban fixed-asset investment rose 30.3 pct year-on-year in the first five months of the year to 2.54 trln yuan.
The circular, jointly compiled by several government agencies, told local government to review all new projects launched since the beginning of the year and halt those that do not comply with regulation or policy.
It also requested local authorities rigorously assess plans for new projects and properly implement review and approval procedures.
The authorities must strengthen regulation over the use of land while commercial banks and policy banks need to impose stringent review of loan application for new projects to avoid risks, it added.
Local authorities must rigidly limit new projects in industries with oversupply problems, including steel, auto, cement and coal.
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