China's efforts to cool the heated economy have borne fruit, but policy makers must guard against a rebound in inflation and fixed-asset investment, the country's development chief said in remarks seen on Tuesday. "While fully acknowledging the clear effects of the present macro-control measures, we must also be sober-minded and see that these effects are provisional and we must continue to strengthen and perfect them," Ma Kai, head of the National Development and Reform Commission, said.

Worried that rapid growth in investment and credit could cause the economy to overheat, Beijing has clamped down on some industrial projects, restricted bank lending, and, last October, increased interest rates for the first time in nine years. The measures have cooled consumer inflation from 5.3 percent in the 12 months through August to 2.4 percent in the year through December.

Copyright Reuters, 2005