As an important mark of the effectiveness of the macro-control, investment growth in some overheated sectors, such as: iron & steel, cement and electrolytic aluminum and real estate has by now been slowed down noticeably. From last January to July, the iron & steel industry grew 44.2 percent, dropping 128.4 percentage points from January-February; cement increased 54.9 percent, 82.4 percentage points lower; and real estate increased 28.6 percent, down 21.6 percentage points.

Since the later half of last year, the nation has seen excessive growth of fixed asset investment, with more than allowed number of new projects kicked off on too large a scale in construction. Particularly, investment structure turned out irrational in some sectors such as iron & steel, electrolytic aluminum and cement, which saw serious rash investment and redundant, low-level construction. The central authority, adhering to the principle of "taking resolute, forceful macro-control measures at proper times; dealing with problems individually and striving for substantial results", worked out a series of policies and measures, mainly economic and legal means, to control tightly the supply of bank loans and land.

Strengthen the guiding role of industrial policies and tighten market accession

Beginning from last year, the state gradually published temporary standards for market accession of iron & steel, electrolytic aluminum, cement, calcium carbide, iron alloy and coke, in an effort to control the total production amount and knock incapable producers out of the market. Efforts were also made in raising the proportion of statutory capital in projects of these sectors to guard against financial risks. A batch of projects running counter to law, regulations and industrial policies was called to halt, and land supply to projects of this kind was curbed.

The central authority also saved a sum of 1.2 billion yuan by finding out and stopping 77 unauthorized projects of government office buildings covering a total area of 540,000 square meters. Related departments also formulated and published stricter standards on the construction of city squares and roads and strengthened administration over rural land and fund for construction use. As a result, the trend of building super-large squares and roads wider than permitted was initially checked.

Firmly control the "lock gates" of credit and land

To lay a firm hold on credit and land supply is the fundamental way for curbing excessive investment growth. After raising the reserve ratio on deposits of commercial banks by 1 percentage point last year, the central bank again raised the ratio by 0.5 percentage point. At the same time, the bank announced that it would raise the interest rates it charges banks for loans by nearly two-thirds of a percentage point, and would require the weakest banks to hold larger reserves. Taken together, the two measures represented a moderate tightening of monetary policy. The China Banking Regulatory Commission (CBRC) and the National Development and Reform Commission repeatedly issued notices demanding strict control on excessive growth of monetary loans and guiding banks to adjust their loan structure.

In its decision of rectifying the order of the land market made in the later half of last year, the State Council stressed to further strengthen administration on land use, earnestly investigate and handle illegal land use and improve the land management system. The State Council also made a thorough check on the construction of all types of development zones and golf courses. By the end of last July, a total number of 4,735 or 70.2 percent of development zones nationwide (excluding Inner Mongolia) had been cancelled, which covered an area of 24,100 mu (15 mu = one hectare), or 64.4 percent of the original planned area. Altogether 61 unauthorized golf courses were uncovered, saving a land of 57,600 mu and an investment of 7.5 billion yuan. This means a recovery of 2617 square kilometers of land nationwide of which 1324 square kilometers have been re-cultivated.

A thorough clearance of planned investment and projects already under construction

In last April, the State Council decided to conduct a thorough check on investment of fixed asset and asked all local authorities to comb through all planned and already started projects and deal with the unauthorized.

As an important measure of the macro-control this time, the checkup proved effective in curbing the growth of excessive investment combined with other measures such as firm control on bank credit and land approval. As a result, a batch of backward manufactures, techniques and products were winnowed out and industrial structure was improved.

The effect of macro-control has been further proved under joint efforts by local departments judging from the general situation of current investment. Expect for investment in the primary industry, major growth rates all dropped noticeably from January to July compared with the January-February period. Viewing from the investment growth, from January to July, a total of 2,711.6 billion yuan was completed in urban areas nationwide, increasing by 31.1 percent, a drop of 21.9 percentage points. Regarding industrial structure, investment in the primary industry reached 27.7 billion yuan, a growth of 15 percent and 40.1 percentage points quicker in growth degree. Investment in the secondary industry stood at 1085.2 billion yuan, up 42.5 percent and a drop of 36.1 percentage points in growth rate. That in the tertiary industry was 1598.8 billion yuan, up 24.6 percent and a drop of 16.4 percentage points in growth rate. Viewing from newly started projects, from January to July, a total of 80,851 projects were kicked off with a total fund of 2,741.5 billion yuan, up 27.3 percent and a drop of 78.3 percentage points in growth rate.

The current tendency of investment operation fully demonstrated that the macro-control measures adopted by the central authority are necessary, timely, appropriate and effective. Since we are still in a critical period of macro-control, we must unflaggingly implement all adjusting measures already issued as well as protect and give full play to enthusiasm for development from all sides in order to keep stable and fast development of the national economy.

By People's Daily Online