China Rejects $28 Billion In Steel Contracts
BEIJING (AP) — Chinese authorities have rejected $28 billion worth of steel and other proposed industrial projects as they try to curb chaotic overinvestment the government worries could lead to economic trouble, officials said Friday.
Business groups and economists have warned that Beijing's huge stimulus might fuel a dangerous boom and bust. The government responded in September by announcing investment curbs on industries that produce steel, cement, glass, polysilicon used in solar panels and wind power equipment.
Authorities are especially concerned about the steel industry, which already is the world's largest. It is expanding rapidly as construction companies buy materials for stimulus-financed public works projects.
"The phenomenon of setting up these projects without approval is very severe in the steel industry," Zhu Xingxiang, director of the Environment Ministry's department of environmental evaluation, said at a news conference.
Beijing's 4 trillion yuan ($586 billion) stimulus and a surge in bank lending helped to boost China's economic growth rate to 8.9 percent in the latest quarter.
The 47 industrial projects rejected so far had proposed total investment of 191 billion yuan ($28 billion), Zhu and other officials said. They gave no details of individual projects but said 70 percent were in the steel, petrochemical, nonferrous metals and power-generation industries.
Another 339 projects totaling 1.7 trillion yuan ($252 billion) in investment were approved, the officials said. They gave no indication how many more projects were still to be reviewed.