China's top economic planning organ is considering limiting investment in large-scale shipbuilding projects to prevent the market from overheating, according to the China Securities Journal.

The National Development and Reform Commission (NDRC) and the Commission of Science Technology and Industry for National Defense (CSTIND) were reportedly working on regulations and policies that require state approval for shipbuilding projects exceeding 100,000 tons.

The policy meant that projects of more than 100,000 tons should be approved by NDRC, while the rest should be referred to local governments, said analysts with Bank of China International (BOC International).

The regulations would aim to upgrade the structure of the industry and curb overheated competition within the industry, analysts said.

But there was no clear timetable for implementing the regulations, said the sources.

China's shipbuilding industry developed rapidly in the first half of 2007, with ship completion up 43 percent and orders surging 165 percent over the same period last year, giving it the largest number of new orders in the world.

The production capacity of the ongoing and planned projects have reached 40 million dwt (dead weight tons), far exceeding CSTIND's goal of achieving annual productivity of 17 million deadweight tons in 2010.

"But there has been no over-production," said sources with CSTIND.

The previous goal could be geared upward as the international market demand had increased in recent months, said the sources.

According to statistics from the UK-based Clarkson World Shipyard Monitor, shipbuilding orders worldwide have reached 107.7 million dwt and completed shipbuilding projects reached 37.6 million dwt in the first half, up 28 percent and 8.4 percent respectively from the same period last year.