The minister of the State Planning Commission has announced a ban on investment in luxury hotels, commercial centres and office buildings, saying funds should go to infrastructure projects. Addressing the National People's Congress yesterday, Chen Jinhua supplied economic targets for the year: 8 per cent growth, 3 per cent retail price inflation and a rise in fixed-asset investment of at least 10 per cent. Some foreign analysts think the 8 per cent target is unattainable because of sluggish domestic demand and slowing foreign investment and exports. Mr Chen said growth would come from a mixture of domestic and foreign investment, which would have access to more sectors and be encouraged to offer project financing and build-operate-transfer projects. The mainland will spend 2.78 trillion yuan (about HK$2.58 trillion) this year on fixed-asset investment, up from 2.53 trillion yuan last year, with most going to agriculture, forestry, irrigation, roads, railways, environmental protection, hi-tech industry and low-cost urban housing. 'Because of the serious surplus of luxury real estate, we will in principle not build new high-class department stores, hotels or office buildings,' Mr Chen said. He promised last month US$1 trillion would be spent over the next three years, to ensure a growth rate of 8 per cent - the minimum officials think is needed to keep unemployment acceptable. Funding will come from Beijing, domestic and foreign bonds and loans, foreign investment and contributions from provincial governments. Mr Chen said an appropriately stringent financial policy would be followed with the aim of cutting the budget deficit this year to 46 billion yuan from 56 billion yuan last year. The priority for spending will be buying grain, at higher than market prices if necessary, tax refunds on exports, finding new jobs for laid-off workers and paying the basic minimum living wage to the urban unemployed. Mr Chen acknowledged problems - irrational investment, a concentration on quantity instead of quality, and the weak base of agriculture. By the end of last year, the number of firms operating in the red was up 11 per cent from a year earlier. Supervision of the financial system is inadequate, while banks have too heavy a burden of bad loans and inadequate capital-adequacy ratios.