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SCMP Reporter

Governor orders immediate halt to all golf course construction as first move

Guangdong officials have been ordered to rein in 'excessive investment' by Governor Huang Huahua    in an attempt to prevent  inflation.

One of the first sectors to be hit is property development, with all golf course construction being put on hold. There are 17 courses being built in the province, involving billions of yuan in investment.

Xinhua reported that any golf course projects which had not been approved by the provincial government must be scrapped.

The move to control investment comes after the central government called for the brakes to be applied to the mainland economy, which grew by 9.1 per cent last year. Mr Huang told local officials to 'fully comply with the central government's decision and prevent inflation'.

He said while Guangdong's economy was in good shape, it suffered from severe power shortages and a sharp rise in the prices of raw materials.

'We must regulate the pace of  investment, prevent inflation and make sure the economy does not fluctuate excessively,' the Guangzhou Daily quoted Mr Huang as saying. He asked officials to review all development projects under way in the province to avoid repetitive investment. He also vowed to tighten restrictions on land use and money lending.

'We need to optimise our investment plans and focus on a few key projects,' Mr Huang was quoted as saying. The government would limit price increases, stock up on raw materials and build up greater electricity reserves to combat inflation.

The governor also called for measures to stabilise food prices. Food costs account for about a third of the increase in China's consumer price index.

In Guangzhou, Vice-Mayor Shen Bainian ordered city officials to review all development projects and submit reports to him before May 25.

Mr Shen said the city would focus on examining projects related to steel making, cement production, government buildings, golf courses, exhibition centres, logistic parks and shopping malls.

'We must strictly obey the central government's order and use this opportunity to restructure our investment plans,' Mr Shen said.  But scholars said the overheating problem was not very serious in Guangdong.

'There are indeed some repetitive investments and  prices have gone up a bit. But generally speaking, the problem is not too serious,' said Chen Zuhuang ,   director of the Guangdong government's policy research office.

'Not so long ago, we were suffering from deflation.'

He said the problem was mainly caused by officials eager to use short-term economic growth to score points.

He said the optimism generated by China's strong economic performance and  successful entry into the World Trade Organisation also encouraged foreign investors to inject money into the mainland.

'We need to adjust our policy. But this is not as bad as the economic overheating in 1993. We now have better financial institutions and a more sophisticated market mechanism in place,' he said.

'The problem of excessive investment in the Pearl River Delta is not as serious as it is in other places, such as the Yangtze River Delta.'



Guangdong to restrict investment