Overproduction risks loom large in China?

(Xinhua, Aug 14, 2006) An overproduction crisis may occur in China if investment runs out of control, Economist Wang Xiaoguang with the National Development and Reform Commission (NDRC) told Xinhua on Monday.

Rising fixed-assets investment has sustained demand in sectors like iron and steel, concrete, electricity, coke, textile and automobiles over the first half of the year, but continuous large-scale investment could trigger a crisis of overproduction, said the director of the Economic Research Institute of NDRC.

Wang said that more than half of the investment in cities and townships had been made by state-owned companies in line with a call by local governments.

Driven by an administrative agenda, this investment had little impact on job opportunities or workers' income. Much domestic production would simply generate tax revenue for the government source:http://www.zoomchina.com.cn/index.php?op...