In fixed assets investment，impulsive and low-level redundant projects remain incessant as a chronic disease after prolonged restriction. From textile to electrical appliances and from machinery to automobiles，redundant projects cause production capacity of many industries to substantially exceed the market demand，which has caused over competition resulting in huge waste of resources. If the problem of redundant projects are not resolved，investment returns cannot be improved，and structure optimization and economical growth pattern will not make progress. To resolutely correct redundant projects is an issue of priority that the current investment system reform has to resolve.

Redundant projects are a special phenomenon occurring during transformation of economical system and economical growth patterns. The reason is that，first，under the system of segmentation between regions and departments，investment decision system characterized by administrative approval caused separation of responsibilities and powers as well as failure of decision making；second，the market system is not perfect enough to achieve ideal resource distribution；third，without any access to information，the decision makers are short of in-depth survey and correct forecast information；fourth，since a long time ago，extensive operations has formed extended replication of efforts that adopt the outdated decision making methods. As a result，to correct redundant projects，we shall start from speeding up the two fundamental transformations.

A unified national market system and an enhanced market competitive mechanism are the fundamental approaches to eliminating unnecessary redundant projects. Redundant projects come from insufficient market competition. To eliminate living conditions of the backward projects and effectively conquer redundant projects，we have to rely on market selection and make funds rapidly raised for the construction projects and enterprises with advanced technology and scientific management and in line with large scale economy requirements.

Meanwhile，we shall speed up investment mechanism reform，strive to make enterprise as investment bodies，make decisions and bear risks by themselves for the investments. Only when enterprises truly bear risk responsibilities，can they seriously conduct feasibility study of construction projects and proactively manage recoupment of investment，and they will be able to avoid impulsive and redundant implementation of investment projects.

On requirements of deepening financial system reform，commercial banks shall make independent assessment and decisions towards the investment projects applying for loans. For impulsive/ redundant projects，the banks may refuse to provide loans based on viability assessment of the projects. The government shall no longer intervene in loans assessment by commercial banks. This will reduce funding provided to redundant projects. As a result，it imposes a higher requirement on the commercial banks in project assessment. It is both an effective method in curbing redundant projects and an objective requirement on reducing the banks’ non-performing loan proportion and preventing or solving financial risks.

Investment by financial grant of the government shall establish a State-owned assets investor system，carry out enterprise operation and separate operational function of state-owned capital investment from macro control functions by the government towards investment of the whole society. Government departments can concentrate their attention to regulate investment volume and structure. Major projects funded by the State can establish undertaker of the projects through tender. Government investment can be commissioned to authorized investors，including state-owned capital investment companies，state-owned assets operation companies and state-owned enterprise groups. Investment institutions funded by the Government shall have power in investment decision making，setting financial returns，assets operation and operator selection to ensure appreciation of state-owned assets. Financial investment shall mainly go to fundamental and public construction projects and high-tech and industrial projects that are able to drive structural upgrading. Financial investment and policy loan investment as financial resource controlled by the State shall be investment incentive to realize the national economic development strategy and structural adjustment，play a role of catalyst for investment direction of the whole social funds，lead the social funds to investment in line with requirements of the State and effectively avoid redundant projects.

The State investment management departments shall fully collect and analyze investment information of all industries and release it on timely basis to the society to keep the enterprises updated with demand and supply situation and production capacity under construction and overcome impulsiveness of investment decision making.

It is an important requirement for overcoming the problem of low-level redundant projects to enhance technological innovation ability of enterprises and actively develop new products，technology and techniques. Now，many enterprises cannot find good investment projects only because of the shortage of technology availability. We shall expand the scope of options for technical enterprise investment projects by combining technological implementation and independent development.