New investment to expand the need to prevent overheating

 Wang Yuzhen
international economic environment to resist the negative impact on China, the State Council decided to implement a proactive fiscal policy and loose monetary policy, to determine the current efforts to expand domestic demand and promote economic growth in the 10 measures. After preliminary calculations the end of 2010 about 4 trillion yuan investment.
week, local governments have introduced investment rescue package, , Jiangsu, Zhejiang, Guangdong, Henan and other provinces are invariably introduced a series of investment initiatives. According to past experience, the central and local investment and social investment is about 1:3, the next two years a total of 4 trillion yuan economic stimulus plan , the central government invested about 1 trillion yuan, the rest of the local government and social investment. Among them, Beijing announced the investment of two years from 120 to 150 billion yuan; Shandong Province, throw a long list of 8,000 billion investment; Jiangsu Province announced the allocation of 300 billion yuan a year as the government guidance funds.
these measures to deal with international economic and financial crisis should be effective and beneficial. but in the implementation process, be sure to prevent blind investment and overheated investment, to be balanced, reasonable arrangements for the rhythm, stress practical results.
prevent blind investment in the new round of overheating and there has been investment in China
impulses, each of the over-investment that the Government is promoting in particular the strong results of the local government, and each a macro-control measures are the inevitable over-investment, overheating of investment and the strong inhibition control, but also led to a number of projects aborted or horse, resulting in enormous waste of resources; and each time after that with the new regulation a round of investment impulse.
strong investment in this round starts, will greatly stimulate the enthusiasm of the local government investment, see the situation from now on, each province has invested a great deal of enthusiasm, even if the less developed provinces, too, Tianjin introduced four initiatives to stimulate domestic demand, net annual investment and strive to reach 1,000 billion yuan. Guangxi and Fujian provinces have also chosen the railway infrastructure as the best tool for stimulating investment. The former commenced estimated total investment of the South-Canton Railway 41.0 billion, the latter from the fourth quarter of 2010 were arranged above the provincial level more than 70 billion yuan of fiscal funds, the provincial key projects completed an investment of 340 billion yuan or more. the local government has just suppressed the impact may be greater investment in the intensity and extent of re-be encouraged to form a new round of investment boom.
investment enthusiasm is all over the face of incentives in the short term have made a large number of launched projects. the economy of Shandong province out of the eloquent, billion review and approval for a short cycle, high pressure, evaluation of difficult scientific and effective, will lead to the formation of a number of extensive projects, which previously cut, and can not be launched or even dismount the projects were approved, resulting in poor science project decisions.
the face of the central and local investment boom and huge enthusiasm, extensive operation to prevent the resurgence of business in order to prevent new loans put the burden of the future; to prevent blind investment and blind corporate mergers and acquisitions; also to prevent companies big blind. Zhejiang Governor Lu Zushan said: held in the three ministries to expand domestic demand to promote stable and rapid economic growth in the conference, the National Development and Reform Commission, said Mu Hong, deputy director for the expansion of domestic demand, investment in the central end of 2010 arrangements will reach 1.18 trillion yuan, can drive 4 trillion yuan of investment. This 4 trillion is only part of the whole social investment does not mean that all of the investment. regardless of whether all the investment, the central arrangement of investment for local governments is undoubtedly the object, no doubt the formation of a new round of actively seek projects around the tide.
central place for projects and funds may also be the emergence of new corruption. According to media reports Henan Province, Henan Province, said the funds allocated for the central Henan Province for the scale of 850 billion yuan , Henan Province to the central goal is to ensure new investment for the 1 / 13, and strive to reach 1 / 10. Vice Governor of Henan Province, has led several provincial departments responsible person, went to Beijing to report on major convergence projects. < br> while another reported that the provinces have gathered the State Development and Reform Commission officials, for projects and project approval, for approval. This may bring new rent-seeking behavior, the formation of new corruption. the same time, flying around the hundreds of billions of large single , how to raise so much money is placed in front of the local government problems.
huge investment in the most fundamental is the money come from? National Development and Reform Commission, said Mu Hong, deputy director, in addition to central government investment, it also needs with the part of local investment. In order to solve the difficulties of local matching funds, is prepared to take two measures: one based on the actual situation, the central input into the direction of increasing the proportion of reduction and exemption of part of the local matching funds. Second, the central government is research, through on-lending or allowing the local government approved manner appropriate channels and methods of financing.
sources to raise money, and some place to innovative forms of financing, such as the Tianjin Binhai New Area, made it clear that initially identified 10 enterprises more than a total of 7 billion collection of bonds for SMEs, as a new type of financing for SMEs. but some places may be the case without central approval of the introduction of new policies, creating a new policy openings. Tianjin Binhai New Area, number of levels of government funds needed to pay part of the policy and the policy of leaving a certain hole, to address the funding issue. It was reported earlier by the Shanghai municipal government does have a District Zhengban issued an internal document from the land , taxation, fixed asset investment in three areas, district and county governments to give some to prevent the excessive use policy, so that the unlimited abuse of national resources.
(of Huaxia Bank, Development Research Department, General Manager, Doctor of Economics)