December 04, 2008

China taking new steps to control investment

It is reported that China 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 that these measures are designed to stop Chinese economy from overheating.

According to a document published recently by the State Council all new projects must be properly authorized and abide by land use, energy efficiency, market access and environmental protection criteria.

The document said relevant departments must establish records for investment projects valued at more than CNY 50 million and submit all relevant information to upper level governments.

It said that projects found to be breaking the guidelines will be halted immediately and offenders punished. It also 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 China government has been increasingly concerned with the speed at which the economy has been growing, with figures for the first three quarters showing YoY year growth of 11.5%.