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Jan-Feb industry output climbs by 16.9%
By Su Bei (China Daily)
Updated: 2005-03-16 02:27

Industrial output showed a strong growth of nearly 17 per cent year-on-year during the first two months of this year, the National Bureau of Statistics announced yesterday.

A worker unloads the steels in a market in Zhengzhou, Central China's Henan Province, March 10, 2005. [newsphoto] 
The bureau, which said the growth was 7.6 per cent in February but 20.9 per cent in January, said industrial output stood at 903.4 billion yuan (US$108.8 billion) during the two months.

Zhang Xueying, a senior economist with the State Information Centre, said industrial output still grew at a higher rate.

"This means the government's macro-control measures have little impact on the speed of the economic development, although the measures helped cool down the investment," he said.

"That's why the government has decided to improve and beef up its macro-control measures this year," he added.

Zhuang Jian, a senior economist with the Asian Development Bank, agreed the industrial output growth for the first two months was strong.

"But it is still too early to say the country's industrial output growth rebounded," he said.

Liang Hong, an economist with Goldman Sachs (Asia), said strong industrial production growth was mainly due to the strong exports.

Exports by industrial companies rose 33.4 per cent year-on-year to 583.8 billion yuan (US$70.3 billion) during the first two months.

The metallurgical and electronics sectors were the biggest contributors. Each grew 26.8 per cent and 19.1 per cent respectively in January and February.

The industrial output is an important indicator for China's economic growth, because it contributed more than 50 per cent to the gross domestic product.

China's industrial output grew 11.1 per cent last year, and its gross domestic product grew 9.5 per cent.

"Given the data released so far, particularly today's industrial production, we expect fixed asset investment to be on the firm side as well, when it is released today," Liang said.

"We believe this will give a clearer signal on firmer growth prospects for the year," she said.

Zhuang said China's gross domestic product is expected to grow about 8.5 per cent during the first quarter, but Zhang said the growth could reach 9 per cent.

However, Zhang said problems in the economy such as energy and transportation constrain would continue to have an impact.

China's industrial output growth peaked at 23.2 per cent in February last year and began to show a slowing trend since then.

But the growth picked up in August and September, raising concerns that the economic cooling measures might lose their effects.

The government has taken a series of measures, including tightening credit and curbing unwanted fixed asset projects, to try to cool the economy.

In a latest move, the People's Bank of China, the central bank, raised the benchmark interest rate by 0.27 percentage point last October, the first increase in nine years.

(China Daily 03/16/2005 page2)



 
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