Teams to probe provincial projects
22pc of investments received no local government permission, reform official says
In its latest effort to rein in fixed-asset investment, the central government is sending six inspection teams to 12 provinces to scrutinise their new investment projects.
The taskforce was a joint effort from eight ministries or ministerial-level agencies, headed by the nation's top economic planning agency, the National Development and Reform Commission (NDRC), commission head Ma Kai said in a speech published on its website yesterday.
Other parties included the Ministry of National Land and Resources, the State Environmental Protection Administration, the China Banking Regulatory Commission and the National Bureau of Statistics.
The 12 provinces where projects will be scrutinised are Shandong, Jiangsu, Hebei, Henan, Anhui, Sichuan, Inner Mongolia, Liaoning, Zhejiang, Jilin, Jiangxi and Hunan .
New investment projects were the focus of the latest round of macroeconomic controls, Mr Ma said. The inspection teams would examine whether provincial governments had taken sufficient action to curb the launch of new projects and crack down on existing ones that flouted the law he added.
Despite some 'positive changes' following the central government's tightening measures put in place early this year, there were still some 'striking problems and contradictions' in the country's economy, Mr Ma said. 'The most outstanding one is the rapid growth of fixed-asset investment,' he said.
Fixed-asset investments surged 29.1 per cent year on year in the first eight months of this year, with the number of projects launched reaching 131,000 and investment totalling 4.5 trillion yuan. 'The management of new investment projects is chaotic,' Mr Ma said.
He said that in a recent survey conducted by the commission, 44.2 per cent of the 3,779 new projects with investment worth more than 100 million yuan lacked proper land acquisition permits; 43.9 per cent did not obtain approval from the environmental protection agencies and 22 per cent had gone ahead without any permission from local governments.
A considerable number of new investments were also launched in overheating sectors where excess capacity was already a problem.
Half of all new projects in the coking industry should not have begun if the local governments were strict about enforcing the tighter macroeconomic rules.
In the coal industry, 42 per cent of all new investments breached government regulations. The figure for iron ore was 39 per cent; cement, 35 per cent; electricity and steel, 26 per cent; and for textiles, 22 per cent, he added.
Sectors experiencing 'considerable overcapacity' included steel, alumina, iron ore, coking and cars, he said, while those at risk were cement, coal, power and textiles.
Despite a series of macroeconomic measures that had helped contain the momentum of blind expansion in some industries, overcapacity had yet to be resolved.
The inspection teams are expected to wrap up their findings later this month, he said.
