Over-growth in Fixed Asset Investment Incurs Risks to China's Machinery Industry

At the first edition of "Automation Technology Summit", which was closed on July 1 in Beijing, China, Cai Weici, Vice President of China Machinery Industry Federation warned that the exceptionally fast growth in fixed asset investment in China's machinery industry, far higher than the country's overall growth, during the first five months this year may pose a risk to the industry. Mr Cai pointed out that a growth in fixed asset investment is understandable following the excellent performance of many Chinese machinery enterprises in recent years. It is also believed that increased fixed asset investment will help revitalize the industry. However, he worried that some of the investments may be put in duplicated projects with low technology level, which lay down a hidden risk of over-supply to the market. For the first five months this year, economic indicators of China's machinery industry remained high. During this period, a growth of 255 or above was seen in all the 13 sectors in the machinery industry except the office equipment, internal combustion engine and civil use machinery sectors, which grew at around 15% instead.