Top leadership warns on overheated economy

BEIJING, July 27 -- The economy has to be stopped from becoming overheated and to ensure that officials at all levels will implement the central government's policies, the country's highest leadership said yesterday.

The Political Bureau of the Communist Party of China (CPC) gave the call after central government inspection teams found some local governments are ignoring the State Council's decision to save energy and cut greenhouse gas emission, and are still investing heavily in high resource-consuming sectors.

"All the local governments, especially leading officials, should implement the central government's measures to the letter," the Political Bureau said at its meeting, chaired by President Hu Jintao.

It told all local governments to understand the consequences of the blistering economic growth: 11.9 percent in the second quarter, and 11.5 percent in the first half of the year.

Fixed-asset investment in urban areas jumped 26.7 percent in the first half year-on-year and a large part of the money went into industries that consume huge amounts of energy.

"The priority now is to prevent the economy from overheating," the meeting said.

Hu emphasized the importance of seeing the ever-changing domestic and international economic environment in the right perspective, and called for continual effort to tackle issues such as excessive liquidity and overcapacity.

Agricultural production, especially grain output, should be increased and the development of agricultural infrastructure accelerated, he said.

Efforts to save energy and reduce greenhouse gas emission should be intensified, Hu said. People's lives should be improved by tackling problems that concern them, such as those associated with education, employment, healthcare, housing, and work safety.

The "commitment" to cutting energy consumption per unit of GDP by 20 percent during the 11th Five-Year Plan (2006-10) is a "challenge", the CPC Political Bureau said.

Experts said some local governments don't have enough funds to meet the goal.

Huang Shengchu, president of the China Coal Information Institute, said the current situation is not because of difference in thinking but because some local governments lack funds.