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Tight control drags down growth pace
By Xu Dashan (China Daily)
Updated: 2004-08-11 00:14
Growth in China's industrial output slowed down in July thanks to the central
government's measures to cool the economy.
The country's industrial output rose 15.5 per cent in July compared with the
same month of last year, according to the National Bureau of Statistics.
But the growth rate was 0.7 percentage points lower than the previous month,
the bureau said in a statement Tuesday.
In June, growth slowed 1.3 percentage points compared with May, earlier
figures indicated.
For the first seven months, output rose 17.3 per cent from the same period of
last year.
Economist Zhang Xueying at the State Information Centre said the slower rate
suggests the central government's macro-control measures have taken effect.
China has taken a raft of measures since the second half of last year to try
to cool down the economy. They include raising bank reserve requirements three
times and curbing unwanted fixed asset investment projects.
"These measures have had a great impact on fixed asset investment and
industrial output," he said.
Zhu Jianfang, an economist at China Securities, agreed the high industrial
growth since last year has been dragged down.
"Industrial growth in July was not high at all," he said.
Zhang actually expressed fears for a fast decline in industrial output growth
and fixed asset investment.
"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 per cent to keep people in work.
"We need to prevent such a downward trend from speeding up in the coming
months," Zhang said.
Growth in the output of aluminium, a sector targeted by the government in its
drive to reduce investment, slowed to 10.8 per cent in July from 16.2 per cent
in June, the statistics bureau said.
Cement production growth fell to 11 per cent from 13.2 per cent, and cars to
5.4 per cent from 20.4 per cent.
Industrial output is an important indicator for gross domestic product.
China's industrial output grew by 17 per cent last year, and its gross domestic
product grew by 9.1 per cent.
During the first half of this year, industrial output grew year-on-year 17.7
per cent and the country's gross domestic product rose 9.7 per cent.
Statistics bureau spokesman Zheng Jingping said the overall performance of
the country's economy was good.
The national economy kept stable with fast growth, while economic efficiency
was improved continuously, he said.
Uncertainties and unhealthy factors in economic performance have also been
placed under initial control, Zheng said.
But the government should be aware at the same time that those prominent
problems existing in the economy have not been rooted out fundamentally, he
said.
Energy and transport bottlenecks and rapid growth in fixed asset investments
in some sectors are still troubling, he said.
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