Administrative measures may not be as effective as monetary tightening because local authorities may find ways to skirt central government commands, some economists said.

"We wouldn't look for a sharp downturn in spending because of these new policy announcements," said Jonathan Anderson, chief Asia economist at UBS AG in Hong Kong. ``Beijing never has much success with this kind of industrial policy management.''

Industrial output probably rose 18.9 percent in July, slowing from June's 19.5 percent expansion, the Bloomberg Survey showed. Production figures are due at 10 a.m. local time today.

Semiconductor Plants

Growth in overall fixed-asset investment, which includes spending in rural areas, will slow to as little as 20 percent in the second half from 30 percent in the first half, the National Development and Reform Commission said in a report published in the China Securities Journal on Aug. 3. The economic planning agency targets 18 percent expansion for the full year.

Investment is still rising at almost triple the pace of the overall economy as companies including Semiconductor Manufacturing International Corp. build factories in the nation to meet surging domestic demand. Semiconductor Manufacturing is spending $1.1 billion this year to expand capacity at its plants on the mainland.

"Our China business is growing rapidly and steadily so we have to position ourselves to have enough capacity to service our customers in China and worldwide," Chief Executive Richard Chang said in a July 31 interview.

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