China’s industrial output may decelerate
The growth in China's industrial output may slow in the coming months as the government is trying to control the investments in some sectors such as including real estate, steel and cement, for fear of overheating. China's industrial output increased by 16.6% in the first two months of 2004 when compared with the same period of last year due to the rise in automobile and machinery production. State Development and Reform Commission (SDRC) official pointed out that international investors shifted their focus from China to the US due to economic recovery. He also added that investors act prudently about investing in China because of expected overheating in some sectors. According to the data released by Ministry of Commerce, foreign direct investments reached $8.32 billion in the first two months of 2004 with a 10.3% rise compared to the corresponding period of last year. But, slowdown is expected in foreign direct investments in the coming months. The reasons of the slowdown are that SDRC will stop approving new construction projects of steel groups, steel and iron mills. Furthermore, SDRC is collaborating with banking sector to tighten credit requirements for steel projects. The government will also not give permission land development and construction of steel projects that are not in line with the industrial policy and development plan. China's fixed assets investment amounted to Yuan 133.2 billion ($16 billion) in 2003, up by 89.2% compared to 2002. It is expected that China's annual steel output will reach 330 million tons by the end of 2005 and this is considered to meet the market demand of 2010.