In a speech at Tsinghua University last month, National Development Reform Commission Minister Ma Kai warned: 'Old problems have not been solved, new problems arise.' For China observers, this was no ordinary classroom lecture, because Mr Ma issued the most severe economic warning since former premier Zhu Rongji slammed the brakes on with 'macro controls' to harness runaway inflation in 1993.
China's market potential has provided an endless stream of cocktail party talk around Beijing and Shanghai. But by soberly warning that 'the achievements of the current macro-control measures cannot be overestimated', Mr Ma offered a wake-up call.
He said that macro controls must prevent any rebounds, and matters could not be allowed to slip. He also predicted that 'this year's macro controls will influence the outset of the 11th five-year plan, so we cannot drop our guard'.
Immediately after his speech, Mr Ma drove to Tangshan , in nearby Hebei province , to inspect the local enterprises. His trip seemed symbolic, intending to underscore his concerns: Tangshan is Beijing's closest centre for steel and cement production - the industries which are leading China's economic overheating.
At last month's National People's Congress, Mr Ma broke with tradition by warning of unstable economic foundations, rather than heaping praise on China's economic achievements. China's macro controls are failing to control fixed-asset investment. Mr Ma severely chastised local governments for ignoring the warning trends, and instead continuing to pump money into redundant construction.
However, the problem is set to get worse, forcing Beijing to adopt more-severe measures. The National Development Reform Commission, in charge of overall economic management, has identified overheating fixed-asset investments as its single biggest headache. Growth reached 24.5 per cent year on year for the first two months of this year, which is almost equivalent to the average total gross domestic product growth for last year.
Despite Premier Wen Jiabao's call for macro-control measures, the economy is not slowing but is, arguably, accelerating because current growth is built on the momentum from previous years.
