Zhu Rongji

Mainland to step up economic cooling moves

PUBLISHED : Saturday, 03 November, 2007, 12:00am
UPDATED : Saturday, 03 November, 2007, 12:00am

The central government will step up measures to prevent economic overheating and its main economic goal is to control investment and export growth, according to the top planning agency.

The mainland economy expanded 11.5 per cent year on year in the third quarter, slowing from the 11.9 per cent rise in the second quarter but surpassing the government's 8 per cent target for this year.

'We must keep sober-minded that there are outstanding contradictions and problems existing in the current economic operation,' Zhu Hongren, vice-head of the National Development and Reform Commission's economic operations department, told a conference reviewing economic performance in the June-September period yesterday.

'In the remaining two months of the year, the government will further strengthen and improve macroeconomic controls and continue to avert economic overheating.'

Mr Zhu said the control measures included limiting the overly rapid growth in capital investment, exports and some energy-intensive sectors such as steel.

He said that despite the rise in international energy prices, the mainland's energy-intensive industries were still growing too fast. He added that it was still difficult to resolve the country's regional and seasonal power shortages.

President and party chief Hu Jintao has made energy-efficient growth a central policy theme, with his favoured governing philosophy - 'scientific outlook of development' included in the party's constitution.

Production of energy-intensive products such as electrolytic aluminium and zinc grew at a faster pace in the first three quarters of this year than a year ago, despite a government policy to curb output.

The government aimed to reduce the rate of energy consumption per unit of gross domestic product 20 per cent in five years between 2006 and 2010. However, it has so far failed to achieve the target.

Government ministries would step up co-ordination of industrial, fiscal, credit, land-use, environmental and investment polices to keep growth in check, Mr Zhu said, without giving further details.

Xia Nong, a deputy head of the commission's industrial policy department, said at yesterday's conference that the service sector made a smaller contribution to GDP in the first three quarters. The sector accounted for 38.7 per cent, down 3.3 percentage points and 0.5 percentage points from the first quarter and the first half respectively, he said.

'The growth of the service sector quickened in the first nine months over the same period a year earlier. However, it failed to outpace the growth of secondary industry and the national economy as a whole.'

Chill seekers

Despite a growth target of 8 per cent for this year, third-quarter expansion hit 11.5%