China to appropriately control scale of investment: premier

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Last updated at: (Beijing Time) Friday, March 05, 2004

China to appropriately control scale of investment: premier

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The government will appropriately control the scale of investment in fixed assets and firmly halt haphazard investment and low-level, redundant construction in some industries and regions, Chinese Premier Wen Jiabao said Friday.

Guided by market forces, the government will use a comprehensive range of measures, mainly economic and legal means supplemented by any necessary administrative measures, to strengthen guidance and control, Wen said in a government work report delivered at the opening of the national legislature's annual session.

First, industrial policies and planning should be improved and the information release system for industries should be improved to correctly guide nongovernmental investment.

Second, the government must quickly formulate and revise standards for admittance into industries and enforce market admittance strictly. Projects that do not meet standards for environmental protection, safety, energy consumption, level of technology or quality and have not yet been started should be blocked and those already under construction should resolve such problems, while those already completed should be upgraded within a specified time.

Third, land-use management must be improved in accordance with the law. No land should be approved for projects that fail to meet the requirements of the state's industrial policies and standards for admittance into industries. The government should continue clearing up problems relating to development zones and rectifying and standardizing the land market.

Fourth, auditing and oversight of credit transactions must be strengthened. Financial institutions should not make any loans to new projects or rebuilding and expansion projects that do not meet the requirements for market access.

Fifth, the taxation system must be tightened and the practice of introducing unauthorized tax privileges must be stopped and rectified.

"On the basis of these measures we will strive to optimize the investment structure, keep the overall investment volume at a reasonable level and improve returns on investment," Wen said.

In order to take a new road to industrialization, China must base the national economy and society on IT and upgrade the industrial structure, according to the premier.

To ensure stable and rapid economic development, China must alleviate the current disparities between supply and demand in energy, important raw and processed materials and transport capacity, he said.

The premier went on to say that balancing investment and consumption is an important aspect of this year's work for macro-control. He said that consumption occupies too small a proportion of China's GDP, noting this is not conducive to ensuring a stable increase in domestic demand, sustaining rapid economic growth and establishing a beneficial economic cycle.

The government must work hard to increase the incomes of both urban and rural residents and raise their purchasing power.

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Premier Wen delivers government work report

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