Industrial Production News
- Industrial output growth slows further
Date: 16-Nov-2007 Sources: (Shenzhen Daily)
THE country's industrial output eased again in October, according to figures released Thursday that indicated government steps to slow the economy were having some effect.
Industrial output, a key indicator of the pace of overall economic growth, expanded by 17.9 percent in October from the same month a year ago, the National Bureau of Statistics said.
This marked a slowdown from 18.9 percent growth in September and compares with a peak of 19.4 percent in June.
Analysts attributed the trend to a slightly slower pace of export growth and a series of government measures to cool the economy.
'The main reason is the slowdown in the exports as it accounts for a large part of industrial output,'Chen Jijun, an analyst with CITIC Securities in Beijing, said. 'Investment restrictions also contributed.'
The government Monday announced that October saw a record monthly trade surplus of US$27.1 billion. Exports, however, grew a relatively meagre 22.3 percent year on year compared with 29 percent in the first seven months of the year.
Economists have attributed the deceleration in exports to the slow but steady appreciation of the yuan, which makes Chinese-made products more expensive overseas.
However, investment bank Goldman Sachs said the October industrial data looks unlikely to put a stop to economic cooling measures.
Concerned about possible overheating, the government has raised interest rates and taken other steps to rein in the economy several times this year, to little or no visible effect until recently.
The government was much more influenced by the historically high inflation rate of 6.5 percent for October, also announced earlier this week, than industrial output, Goldman Sachs said in a note to investors.
'Despite the softening in industrial production growth, the 11-year record-high inflation rate reported for October left the authorities with little choice but to tighten monetary policy further,'said the note, which predicted further measures to dampen growth.
China's economy grew at a furious pace of 11.5 percent in both the third quarter and the first nine months of the year. The central bank last week predicted full-year growth of 11 percent, while many economists expect it to exceed that.
Signalling its concern, the government has decided on a number of additional new steps to curb inflation, domestic media reported Thursday.
They include boosting investment, subsidies and other moves to encourage more output by farms and the oil sector, while adjusting tariffs to draw in more imports, Xinhua said.
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