BEIJING has reimposed some form of centralised control over production to fight the worsening problem of stagflation.
And Vice-Premier Zhu Rongji has been forced to make further relaxations in the money supply in spite of his commitment to tighten policy in that area.
A special State Council conference on sluggish sales has recommended that factories whose products end up in warehouses should stop operation.
''All industrial departments should grasp well the task of limiting the amount of goods in storage and promoting sales,'' the Economic Daily yesterday quoted participants as saying.
''Products that cannot be sold should no longer be manufactured.'' Commodities that are piling up in storages include steel and iron products, automobiles, videos, petrol, timber and cement.
Funds tied down by products manufactured by factories operating within the state budget reached 169.47 billion yuan (about HK$152.86 billion) by the end of July, up 11.72 per cent from the same period last year.
The Economic Daily quoted ''leading cadres'' from the State Economic and Trade Commission as calling upon officials to cut down on the production of unwanted products.