Economists say government will stick to present macroeconomic policies Economists have warned of the danger of a rebound in capital investment and predict the central government will continue to steer the same macroeconomic course despite data suggesting a moderation of economic growth in the past quarter. They said it was too early to forecast a relaxation of government tightening measures even though they were basically upbeat about the level of economic activity expected in the final quarter of the year. 'There are signs that the economy is heading for improvement,' said Li Junjie , head of a taskforce analysing and forecasting the economic climate at the National Development and Reform Commission's Macroeconomic Research Academy. Mr Li said the most recent data suggested the tightening measures imposed since the second quarter of the year had been timely and effective. Yi Xianrong , chief of the Academy of Social Sciences' Financial Development Research Office, said it was too early to suggest it was time to relax macroeconomic controls, because many administrative measures would only have a short-term effect if policymakers eased up. 'Administrative measures usually have a quick effect but do not fix the problems for long,' Professor Yi said, pointing out that it had been administrative curbs rather than economic leverage that had produced quick results in the recent campaign to rein in red-hot investment and cool growth. Chairing a State Council meeting looking at the economic agenda for the final quarter on Wednesday, Premier Wen Jiabao said that it was too soon to relax controls. The central government said on Thursday that China's gross domestic product growth, industrial production, fixed-asset investment and money supply growth eased in the third quarter, accompanied by mild inflation, as its macroeconomic control measures began to take effect. GDP grew 10.4 per cent year on year in the third quarter, substantially down on the previous quarter's 11.3 per cent. Economists said the government would continue to implement existing macroeconomic controls to further consolidate the achievement, but further tightening measures were unlikely. Ha Jiming, chief economist at China International Capital Corporation, said investment growth was expected to be moderate, particularly in the heavy industry and real estate sectors. 'Nevertheless, investment will not tumble in the near term, in light of favourable financing conditions, attractive profitability, and government-led investment in bottleneck sectors.' Hong Liang, chief China economist with Goldman Sachs, said that near-term macroeconomic outlook had turned more positive on the back of reduced policy risk, robust corporate earnings and a decline in commodity prices. 'We believe the real economy may have already passed the trough of a shallow correction in growth momentum, induced by the macro policy tightening, and will likely be on a gradual rebound path,' she said.