Growth in China's industrial output slowed down in July in response
to the central government's economic cooling measures.
Industrial output rose 15.5 percent year-on-year to 440.9
billion yuan (US$53.3 billion) in July, 0.7 percentage points lower
than in June, according to the National Bureau of
Statistics.
The bureau's monthly report indicated that strong growth
continued in July in major energy products, raw materials and
top-selling consumer goods, although expansion slowed compared with
the previous month in these sectors as well.
Output of raw coal and crude oil grew 14.0 percent and 4.4
percent, respectively, year-on-year, with growth in both industries
increasing from June. Electricity output rose 11.7 percent, slower
than in June.
Growth in crude and rolled steel rose 20.3 percent and 18.5
percent respectively, 6.5 and 1.2 percentage points higher than in
June.
Auto production in July increased 5.4 percent from a year
earlier, with sedan production up 0.5 percent, which represented
declines of 15.0 and 19.9 percentage points from the previous
month.
For the first seven months, industrial output rose 17.3 percent
to 2.9 trillion yuan (US$354 billion) from the same period of last
year, according reports from state-owned and private industrial
companies annual sales income exceeding 5 million yuan
(US$600,000).
Economist Zhang Xueying of the State Information Center said the
slower rate suggests the central government's macro-control
measures have taken effect. "These measures have had a great impact
on fixed asset investment and industrial output," he said.
China has implemented a series of measures since the second half
of last year to slow excessive economic growth. They include
raising bank reserve requirements three times and curbing unwanted
fixed asset investment projects.
China Securities economist Zhu Jianfang agreed, saying,
"Industrial growth in July was not high at all."
However, Zhang says that care must be taken that the declines in
industrial output growth and fixed asset investment do not become
too rapid.
"I’m worrying about the possibility of an abrupt economic
slowdown," Zhang said.
The government wants to bring economic growth down from current
levels, where many resources, such as oil, have been constrained,
but he said it must stay above 7 percent to keep people
employed.
"We need to prevent the downward trend from accelerating in the
coming months," Zhang said.
Industrial output is an important indicator for gross domestic
product. China's industrial output jumped 17.0 percent last year
and GDP climbed 9.1 percent.
During the first half of this year, industrial output grew 17.7
percent year-on-year and GDP rose 9.7 percent.
Statistics bureau spokesman Zheng Jingping said the overall
state of China's economic health is good. Expansion is fast but
stable and economic efficiency has improved, while initial steps
are being taken to deal with existing problem areas.
However, Zheng noted that the government must remain aware that
those problems persist.
Energy and transport bottlenecks and rapid growth in fixed asset
investments in some sectors are still troubling, he said.
(China Daily August 11, 2004)
