Recent period saw some new occurrences and problems in the operation of national economy, which deserve our attention. There has witnessed a relapse in the fixed assets investment after a downfall for several months on end as compared to the months before. An increase of new projects has come to appear in operation with an uprise in the output of such important raw materials as iron and steel and their prices. Today, when the macro-control measures have taken an initial effect these new motions remind us once again that we must not feel blind sanguine confronting with the present economic situation and attention must be earnestly made to guard against the relapse of some unhealthy and unstable factors.

The fixed assets investment is the source of the partially overheated economy this time and accordingly constitutes the focal point in the major sectors of macro-control adjustment. The investment growth rate in the initial two months of this year reached an unimaginable 53 percent. Effected by a series of macro-control measures from the central government the growth rate saw a decrease month by month. However, the deep-rooted cause for the overheated investment, namely the contradictions in systems and mechanisms, are still in existence while the systems in various fields remain unimproved as before. Under the circumstances, once the macro-control measures are unleashed the investment in fixed assets will easily come to relapse.

Facts say that the assertion is true. When the operation of the macro-controlled economy just entered into the later half of the year a small-scale relapse has come to appear. According to the figures issued by the State Statistic Bureau the accumulated fixed assets investment completed from last January to July added up to RMB 2711.6 billion yuan. It is an increase of 31.1 percent as against the same period before, a growth rate basically the same as that from January to June. However, signs show that in the very month of July the fixed assets investment saw a small-scale relapse over that in June. Though small in scale the phenomenon has roused a great attention of the people.

Judging from the present situation, the fixed assets investment still retains a somewhat large scale, witnessing a big increase of new projects. In the previous 7 months, we saw nationwide projects in construction come to 139,400 in total, an increase of 14,500 items over that in the first half of the year with a planned investment of RMB 1.12 billion yuan in total. It is an increase of 38.1 percent as compared with the same period before and 3.7 percentage points higher than that in the first half of the year. So there still exists a problem of an unreasonable structure of investment.

Blind investment entails a great misery in future. The blind investment in part of the sectors and the repetition and expansion at a low level have already begun to yield bad results. This is mainly expressed in the monthly escalation of stocks in enterprises and the arrears in payment among enterprises began to increase. By the end of June the funds of products and outputs in sizable industrial enterprises witnessed an increase of 19.9 percent over the same period before, a rise of 9.5 percentage points in growth rate. The growth rate in product and output stocks of iron and steel industry has reached 74.2 percent, seeing a retarded withdrawal of enterprise goods payment and mutual arrears in payment. The net amount of funds on account to be collected in industry enterprises saw an increase of 18.7 percent as against the same period before, a rise of 9 percentage points in increase rate.

To consolidate the result and prevent against the relapse, this should be taken an emphatic point for the strengthening of the macro-control work in the later half of the year. Judging from the present situation, there haven't seen a fundamental change in the judgement of the market by some enterprises and local government supports for blind development. Should a freehand be given in the macro-control strength it still exists the possibility for dying embers of overheated investment to rekindle. That some small and backward iron and steel works returned to production under the tacit consent and support of local governments proves a clear indication.

"Within a distance of hundred-li you've covered half of it only when you reached ninety," a Chinese proverb goes. Recently, responsible persons of the Development and Reform Commission and the People's Bank of China have expressed clearly one after another that the macro-control work is still at a crucial juncture. And the present achievements effected still remain at an elementary stage and periodical only as compared to the requirements set by the central government for the strengthening and improving of the macro-control work. We must have a full understanding of the difficulties and complexities of the macro-control work in the light of a new situation and never to get wavered and relaxed. All the work has to be done in an indefatigable way for preventing the relapse of some unhealthy and unstable factors in order to ensure that the expected goal of the macro-control work be realized.

By People's Daily Online