China’s president pledges to rein in investment

BEIJING - China’s President Hu Jintao has called for steps to rein in rapid growth in fixed-asset investment in the second half of this year, underlining Beijing’s concerns about economic overheating, state media said on Monday.

By (Reuters)

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Published: Mon 24 Jul 2006, 8:43 PM

Last updated: Sat 4 Apr 2015, 1:07 PM

His comments come just days after the central bank raised banks’ reserve requirement ratios for the second time in five weeks in the latest effort to ward off excessive investment growth that officials warn is exacerbating economic imbalances.

“First of all, we should put effective controls on fixed-asset investment,” the official Xinhua news agency quoted Hu as saying in outlining the country’s key economic tasks for the second half.

Speaking at a recent meeting, Hu also urged government officials to be aware of “prominent problems” in the economy and to make timely policy adjustments, Xinhua said.

Hu said the government would tighten credit and restrict land use to curb growth in industries that faced overcapacity, as well as those that consumed too many resources or were seriously polluting.

Calls by government economists for authorities to implement further tightening measures have persisted, despite the central bank’s 0.5 percentage point rise in reserve requirement ratios, which was aimed at soaking up liquidity.

The economy grew an unexpectedly strong 11.3 percent in the second quarter from a year earlier, driven largely by red-hot investment and exports.

Overall investment in fixed assets in the first half grew 29.8 percent from a year earlier, while the trade surplus in the first six months was 55 percent larger than a year earlier.

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