China curbs industrial investment
Investment in China’s steelmaking and cement industries, amongst others, is to be drastically cut back following fears that overheating may result in job losses and banking problems. According to economists, Beijing’s stimulus plans are laying the foundation for a treacherous boom-and-bust cycle. The governmental order, announced on Wednesday, will see new aluminum projects banned for three years, with regulators placing a limit on spending at a range of factories. The Chinese government hopes to tweak economic policy in such a way that growth is secured while unnecessary investment is held in check. The large Chinese business community has been waiting anxiously for details of the new policy since August, and many business leaders remain worried that the measures will adversely affect profits.
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