China’s industry minister warned of the risks of “blind expansion and duplicated construction” in government-mandated strategic economic sectors, local media group Caixin reported on its website on Monday.
It was a rare, direct ministerial-level message about over-investment, especially in high-tech sectors that Beijing is backing in a long-term bid to make growth in the world’s No.2 economy greener and cleaner.
“Local governments are very eager, and very proactive, about the strategic emerging sectors, but there are problems like blind expansion and duplicated construction,” Miao Wei, China’s Minister of Industry and Information Industry, was quoted as telling a conference of political and business chiefs.
Caixin did not report if any individual sectors were highlighted, but said that Miao’s ministry was working with local governments and businesses to define where over-investment existed and in which specific sectors.
China has listed alternative energy, biotechnology, new-generation information technology, high-end equipment manufacturing, advanced materials, alternative-fuel cars and energy-saving and environmentally friendly technologies as the core strategic sectors for greener growth.
Beijing plans to channel $1.7 trillion into these sectors in its five-year plan from 2011 by offering policy incentives to spur spending by corporations, investments by local governments and lending by banks.
The vaguely-worded blueprint has provided ample room for local authorities to work on their own, creating pet projects under the guise of being strategic emerging sectors.
China’s economic planning agency is also encouraging foreign investors to bring money and new technologies to grow these sectors.
