Chinese economy 'growing too quickly'

BEIJING - China's economy is currently growing too quickly and needs to be reined in with targeted measures aimed at curbing excessive growth in investment and credit, an official said in comments published today.

Zhu Zhixin, vice-chairman of the National Development and Reform Commission, said that while the economy was developing in a stable manner, the government needed to employ "targeted, preemptive and stabilising" measures to keep growth on track.

"We should use market-based, legal and, where necessary, administrative measures," Zhu was cited as saying.

Zhu said that in addition to overly rapid investment and credit growth, China's excessively large trade surplus was the other main contributor to economic overheating.

Zhu's comments add to a growing chorus of officials calling for further measures to cool growth, following the central bank's raising banks' reserve requirements by half a percentage point earlier this month.

The official Financial News cited Su Ning, deputy head of the People's Bank of China, as calling on local branches of the central bank to step up efforts in support of the government's economic tightening measures.

In particular, Su called on local central bank branches to strengthen their monitoring of growth in credit and property investment to provide the central bank with more accurate information.

Zhu was quoted as saying that one of the main reasons for the excessive growth in investment was that there were many repetitive projects being built.

Currently, 11 industries in China faced overcapacity, he said without elaborating. Other officials have previously said that those include the steel and automobile industries.

- REUTERS