Top China planner again targets heated investment

Beijing, Aug 2: China's top economic planner has again stressed the need to put the brakes on overly rapid fixed-asset investment growth, saying that failure to do so could threaten economic stability.

In a report published in the official Economic Daily on Wednesday, the National Development and Reform Commission said capital spending had grown too quickly this year with potentially serious consequences.

''If we do not control and guide the source of the problem, the situation could deteriorate,'' the commission said.

Failure to rein in investment could spur a series of problems related to the environment, financial stability and the potential for more bad bank loans, the agency said.

The commission called for more measures to prevent local governments from flouting environmental and land supply rules and blindly pursuing economic growth by relying too heavily on investment.

China needed to tighten controls on new projects and reduce bank lending, it said.

Overall fixed-asset investment in China continued to accelerate in June, rising 31.3 percent from a year earlier.

President Hu Jintao has spoken out twice in recent days about the need to reduce capital spending growth, underscoring concern at the highest levels in Beijing about the risks facing the world's fourth-largest economy.

Reuters