Vice-premier Zeng Peiyan plans to slow growth of some overheated industries including steel, aluminium and cement.

"If it is not cooled, investment fever in some industries will heavily affect China's robust economic growth," said Zeng.

Observers sent by the central government will monitor the sectors which were regarded as overheated since the middle of last year. He said the situation could have a serious economic impact at yesterday's national conference.

The readjustment is aimed at curbing excessive growth in the sectors, which puts a strain on transportation and power suppliers, driving up the prices of raw materials and damaging industries across the country.

"It's good news the government is committed to changing the negative trend," Zhang Jianyu, visiting scholar with Tsinghua University told China Daily.

Zhang said many of the projects rely on outdated technology and equipment, affecting the ability to control pollution.

The central government is getting more serious about developing the nation in line with a sustainable economic growth model, Zhang said.

Recently, the country's environmental watchdog, the State Environmental Protection Administration, is working together with the National Bureau of Statistics on an environmentally adjusted domestic product, or a green gross domestic product (GDP) system, that illustrates the interrelationship between the natural environment and the economy.

While conventional indicators of economic performance have failed to take into account the actual scarcity of natural resources, the new system will calculate environmental and economic factors.

According to Zhang, this approach, though long overdue, is expected to halt the current growth mentality which relies on excessive consumption of natural resources and causes serious environmental degradation.

(China Daily February 5, 2004)