BIZCHINA> Review & Analysis
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BIZCHINA> Review & Analysis
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Investment efficiency is key to sustainable growth
By Hu Shaowei (China Daily)
Updated: 2006-09-01 10:04 Therefore, it is necessary to devise a rational resource pricing mechanism that is in line with the fundamental interest of society as a whole. Legislation should be adopted to back up the establishment of a comprehensive capping system for resource use and pollutant discharge. Control of the maximum quantity of resource use and waste release would be essential to the success of our environmental target. If any enterprises exceed the caps, the State should be entitled to intervene and mete out punishment. Meanwhile, it remains necessary to bring out the role of administrative force in reining in excessive investment. For example, the investment-stabilizing role of government officials at all levels should be systemized. This may be the best way to stem investment within the short term. If the role of keeping investment stable were included into the career appraisal framework for government officials, given China's political realities, they would more actively seek out ways to cool down irrational investment. Meanwhile, an effective official accountability system must be established to smooth policy implementation. It is noted that in the August 2 document on clearing out newly started construction projects, which was issued by five central ministries, clear legal evidence is cited to back up the administrative action. This shows the central government is being more legally conscious in carrying out its policies. In this way, it will be easier for the government policies to be seriously implemented. The author is a senior economist from the Economic Forecasting Department of the State Information Centre. (For more biz stories, please visit Industries)
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