Oct. 19 (Bloomberg) -- Faster economic growth in China, fueled by the government’s $586 billion stimulus package and record bank lending, is raising concerns about industrial overcapacity, a government official said today.
“While the government is ensuring economic growth, we are also concerned about overcapacity in some industries,” Xiong Bilin, deputy director of the National Development and Reform Commission’s industry department, said at a briefing in Beijing.
China is curbing financing of projects in industries including steel, cement and aluminum to prevent the government’s stimulus package and $1.3 trillion of new bank loans from spurring excess investment. Economic growth may accelerate to 8.9 percent in the third-quarter from 7.9 percent in the second and 6.1 percent in the first three months of this year, according to a Bloomberg News survey of economists.
Achieving growth of more than 7 percent in the first nine months of this year “shouldn’t be a problem” for the world’s third-biggest economy, Xiong said today. China is scheduled to release third-quarter gross domestic product figures Oct. 22.
The economy may grow 8.5 percent this year, with growth in the second half accelerating to more than 9 percent, Caijing Magazine reported on its Web site late yesterday, citing Yu Bin, head of the macro-economic research department at the State Council Development and Research Center.
China’s State Council, or cabinet, approved plans last month to curb overcapacity in industries including steel, glass and aluminum. The government halted construction of new aluminum smelters, cement plants and the expansion of coking coal projects and shipyards.
Projects that fail to meet government guidelines may not raise capital through sales of bonds or stock, the State Council said on Sept. 29.
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