From the Wall Street Journal:
China, in what the government said was an unprecedented move, has punished three provincial officials for ignoring the central government’s call to slow down investment.
The action highlights the difficulty Beijing faces in trying to control the growth of its runaway economy. The authority of the central government is being limited by provincial and regional officials who approve projects to stimulate economic growth, which has traditionally been a key measure of officials’ performance. Beijing has been trying to put the brakes on the economy because of fears that overheated investment could lead to inflation and a pileup of bad loans.
The governor of Inner Mongolia and his two lieutenants were told to write self-criticisms to China’s powerful State Council for allowing hundreds of millions of dollars of investments in coal-burning power plants that hadn’t been authorized by the central government. It wasn’t clear whether the officials will face further punishment. Such a highly public dressing-down is unusual in China, and it appears the government is trying to send a message that it is serious about its economic policy.[Full Text and Subscribers Only]
