BEIJING, April 26 -- The Chinese Government has announced plans to curb new real estate projects and other overheated sectors by cutting credit in an effort to cool an economy that boomed at 10.2 percent in the first quarter.

    "First we must strengthen adjustments in fixed asset investments and tighten the throttle on land and credit," the National Development and Reform Commission (NDRC) said in a policy paper on its Web site.

    In the first quarter, fixed asset investments rose by 27.7 percent over the same period last year, remaining the main driver of economic growth along with foreign trade.

    From January through March this year, property developers invested 279.3 billion yuan (US$34.8 billion) in construction projects, up 20 percent, the National Bureau of Statistics reported on the weekend. About 50 percent of all real estate investments came from loans.

    With property construction in overdrive, the NDRC's policy paper also warned of dangerous signs of overcapacity and overproduction in some industries such as steel, cement, glass and other building materials.

    So far this year, steel production remained near record highs, but sales during the first quarter were only up by 6.3 percent while profits in the industry fell by 57 percent compared with the same period last year, it said. During the first quarter, the price of glass fell by 17.5 percent, incurring net losses of 620 million yuan. New investments in the glass industry doubled from the same period last year, the NDRC added.

    The NDRC has issued guidelines to accelerate structural adjustment or consolidation in the coal, cement, aluminum, ferroalloy, and coke industries. It said it will shortly issue similar guidelines for other sectors.

    The NDRC also urged energy conservation measures be taken throughout the nation as rising energy prices and economic reforms would increase inflationary pressures.

    China's economy is now expected to grow 9.6 percent this year, with the consumer price index rising by 1.5 percent, the China Academy of Social Sciences forecast in a report issued this week, the Xinhua news agency said.

    (Source: Shenzhen Daily)