China: more controls on investments is needed

The report came amid warnings that China's sizzling economy shows scant signs of slowing despite repeated efforts to bring growth down from double-digit levels.

Photo: China: more controls on investments is needed

The National Development and Reform Commission issued its call for stronger moves to tighten credit in an article published in the state-run newspaper China Securities Journal.

It said China's central bank may raise interest rates on deposits and loans if the "high fever" for investment continues.

The last rate hike, in late April, raised the benchmark lending rate by 27 basis points to 5.85 percent, according to the AP.

The central bank should also issue bills to specific financial institutions, especially after the monthly release of economic data, to tighten the funds they have available.

Such "open market operations" induce banks into locking up large sums of money for a specified period of time in exchange for a higher than usual rate of return, taking money out of circulation.

The central bank conducts such operations routinely on Tuesdays and Thursdays and is known to have organized two non-routine bill sales so far this year to penalize banks whose loan growth was deemed too fast.