Steel, cement curbs work not well

Byzjx

Updated 2004-10-26

Cao Yusuh,the spokesman of National Development and Reform Commission (NDRC), said investment in steel and cement sectors was still too high while oversupply problems in aluminium sector need resolved.

Although credit and investment was reined by the government since late last year, blind investment still exist in many overheated sectors, he said. Capital goods prices goes up too fast, for the sake of a sharp increase in global oil prices.

Cao's comments follow the publication of official data which showed fixed-asset investment rose 27.7 per cent on year in the first nine months,  higher than 22.6 per cent in the same period last year.

the high prices of raw material prompted the investment and credit squeeze, continue to pose a serious threat to the national economy.


Oversupply in several sectors due to irrational investment has emerged, nearly one million ton of aluminium of capacity had been idling by the end of last month.

The investment in aluminium fall 6.5 per cent in the first three quarters from 39.3 per cent sharp growth in the first quarter of this year, he added.


The mainland's electricity output rose 14.5 per cent on year to reach 1.5574 trillion kilowatt-hours in the first three quarters, the statement said. But with winter's coming soon, the rising demand of electricity will cause more severe power supply problems, he said.

How global oil prices will perform in next few months is not yet clear, but the mainland should do strict control over domestic oil prices to try to relieve the pressure on consumer prices and economic performance, he said.

Meanwhile, investment in the property sector slowed in the first nine months of this year compared with the first half, rising 28.3 per cent on year to 835.7 billion yuan (HK$786.6 billion), National Bureau of Statistics figures show.


The outcome was significantly slower than the 38.5 per cent on-year growth rate in the first half of this year as the government continues to apply pressure on banks to reduce excessive lending to the property sector.

The value of spending in the property sector made up less than a quarter of the total fixed-asset investment in the first nine months of this year.

Foreign investment in power plants, metal producers and other fixed assets jumped 60 per cent in the first nine months, accelerating even as government lending curbs slowed spending by domestic investors.

Investment from abroad grew 1.6 percentage points faster than in the first eight months, reaching 260 billion yuan , the statistics bureau said.

China wants more foreign investment in power plants to help boost generating capacity to 2.4 million megawatts by 2020. The nation experienced power shortages in 24 of 27 provinces and four major cities this year as economic growth of more than 9 per cent pushed electricity demand beyond capacity.

Total investment in oil refining and coking coal processing jumped 123 per cent in the first nine months, down from 128 per cent growth in January-August, the bureau said.

Total investment in power, coal and water supply projects rose 48 per cent, after growing 49 per cent in the first eight months.

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