China hints at investment curb

China hints at investment curb

Chinese Prime Minister Wen Jiabao, keenly aware of the dangers of uncontrolled economic growth, recently expressed his cabinet's opinion that in order to cut excessive demand for steel, additional controls are needed in the realm of fixed asset investments. Among the measures Beijing may consider are restrictions on land availability for investment and an imposition of limits on bank loans to steel and real estate industries. The country has already posted a growth rate that is 24.5% higher than expectations through the first two months of 2005. One measure the government has already taken to regulate the steel industry's growth was to introduce an iron ore import licensing system at the beginning of March. Beijing is also expected to cancel the export tax rebate on low-end semi finished steel products on April 1, 2005. Current predictions peg China's economic growth for 2005 at 8.9%.