Chinese Economy - China's Macroeconomic Policies Put Brakes on Investment
October 06, 2004
China's State Development Planning Commission released an official assessment of the set of growth-curbing measures set into motion in April 2004. Approximately 70,600 investment cases have been indefinitely suspended since April, accounting for as much as 17.3 trillion RMB (US$2.1 trillion; US$1 = 8.3 RMB).
A spokesperson for the Commission said that the terminated investment cases mostly consist of state-designated focus industries such as steel and aluminum, but also include exhibition and convention halls, large-scale shopping centers, product distribution centers, and other projects deemed not urgent.
For the first three months of 2004, total investments in private capital assets grew by 47.8% over the same period last year. In order to dampen growth and calm growing concerns that the economy might overheat, starting in April, Beijing implemented the macroeconomic management policies. As a result, the investment growth rate from January to August 2004 stabilized at 30.3%. A Commission member stressed that the policies are still in the beginning stage and that for the foreseeable future, excessive investment projects will be strictly prohibited.