China has ordered an urgent nationwide review of major capital projects, in a bid to weed out illegal projects to slow down investment and avoid an overheating economy.

A document jointly issued by the National Development and Reform Commission, the Ministry of Land and Resources and three other central departments has ordered cross-checks on all capital projects with an investment of over 100 million yuan (US$12.5 million) that were started in the first half of this year.

The projects will be examined to see whether they are in compliance with government's industrial policy, or have been duly approved by authorities.

Investors will also have to prove that they have acquired their land or bank loans in accordance with set rules, and that the feasibility reports and environmental impact assessments have been properly done and approved.

Figures from the National Bureau of Statistics (NBS) show China's urban fixed asset investment surged 31.3 percent in the first half year, the highest for such a period in three years. Planned investments in new projects soared by over 50 percent in eight provinces.

A survey of major capital projects in some regions revealed that 40 percent of the projects were illegal in some aspect.

Determined to prevent the economy from overheating, the government is cracking down on investors and local governments acting illegally.

The new document names steel, electrolyte aluminum, charcoal, automobiles, cement, electricity, textile and other industries as the main targets of the nationwide review.

It will be coordinated by local reform and development commissions, and involve authorities in land supervision, environmental protection, industrial safety, and banking.

Projects with problems would be stopped and allowed to resume only after the problems had been rectified, the document said.

The review would be carried out over a month, after which an audit would be undertaken by the State Council, it said.

(Xinhua News Agency August 4, 2006)