A report from China's economic watchdog has warned that fixed
assets continue to lead runaway investment growth into
overheating.
The National Development and Reform Commission (NDRC) said
overall fixed assets investment during the first half of 2006 grew
29.8 percent to 4.24 trillion yuan (US$530 billion). This is 4.4
percentage points higher than the same period last year.
Meanwhile, nearly 100,000 new construction projects were
commenced which is 18,000 more than the first half of last
year.
Some industries showed signs of overheating. Investment in
textiles surged by 40.6 percent and automobiles by 44.5 percent in
the first half of the year. .
Some projects deviated from the state's industry plan and too
many were similar, the report said.
The problems were attributed to local governments' blind pursuit
of rapid economic development which was excessively driven by
growth in fixed assets investment and rampant illegal land use
exacerbated things, the report observed.?
It suggested efforts to curb the soaring fixed assets investment
could include stricter controls on the number of new projects, more
stringent land use management, tighter bank lending and a more
efficient investment structure.
(Xinhua News Agency August 2, 2006)