By Xi Xuchu
Translated by Wang Jing
Wen Jiabao, premier of the State Council, held the Standing committee of the State Council on 26th, studying the deployment of over capacity and duplication of similar projects of some industries. It is pointed out by the meeting that not only traditional industries with over capacity like steel and cement are stilling expanding blindly, but also emerging industries like wind power and polycrystalline silicon have the tendency of repeated construction. Chinese Version>>
No matter for traditional industries or emerging industries, duplication of similar projects is seeking temporary relief regardless of the consequence. The capacity with blind expanding is bound to have the fate of dying from“starvation”and“starvation and squeezing”. However, facing various risks and hidden troubles, decision makers turn a blind eye to them while making decisions. Especially for some areas, compulsory investment index is set in order to accelerate the pace of economical development, which has strengthened the randomness of blind investment. The so called feasibility study organized by some local governments and enterprises is actually hoodwinking the superior assessment organizations by all means without any scientific feasibility.
Nowadays, some areas charge the operating difficulties upon global financial crisis. Actually, over capacity caused by blind expanding and repeated construction is still a big focus of our economical system even without financial crisis. The expected financial crisis has induced and shifted the deterioration of the chronic to an earlier date. It shows that it is better to say the contemporary difficulty is mainly caused by“internal injury”than“trauma”．The overturning of the cart in front is a warning to the carts behind. If blind expanding of traditional industries with over capacity is adding insult to injury, the piling up of emerging industries will also cause a new round of over capacity. Avoiding following the old road to ruin of traditional industries is a problem emerging industries must envisage.
Recent years, there are indeed some areas that put local interests over anything. Though they seemingly vow to make strict enforcement of orders and prohibitions and obey the overall situation, they overtly agree but covertly oppose. They play petty tricks like“you have your policy, I have my ways of getting around”and“turning around whenever meeting the red light”, or they simply persist their old ways. Facing the resist from local interests, the national interest is obviously brushed aside and the determination and measurement of macroeconomic control are diluted into invisibility. The curbing of repeated construction of some industries with over capacity must use measures of law, economy, technology, standard and necessary administrative strategy comprehensively, harmonize industry, environmental protection, land and financial policy and form a composition of forces leading industries to a healthy development. In a word, iron hand is the only way to curb duplication of similar projects.