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Steady growth won on industrial front
By Xu Dashan (China Daily)
Updated: 2004-09-11 01:00

China's industrial output growth rebounded slightly in August, suggesting the country's macro-control measures may be fading.

The month's industrial output rose 15.9 per cent compared to the same month last year to 454.5 billion yuan (US$54.8 billion), the National Bureau of Statistics said on Friday.

The growth rate was 0.4 percentage point higher than the previous month, the bureau said.

Zhang Liqun, a senior researcher with the State Council's Development Research Centre, said August's industrial situation suggests the impact of the government's economic cooling measures have begun to ebb.

China took a raft of measures since the second half of last year to try to cool down the economy. The measures include raising bank reserve requirements three times and curbing unwanted fixed asset investment projects.

Those measures have had a great impact on the industrial output during the past months, said Niu Li, a senior economist at the State Information Centre.

The industrial output has begun to slow since it peaked at 23.2 per cent in February.

The industrial output slowed 0.7 percentage point in July compared to June and dropped 1.3 percentage points in June compared to May.

The decline in industrial output has aroused worries among many economists, who believe it would increase the possibility of an abrupt economic slowdown.

The government wants to bring economic growth down from the levels where many resources such as oil have been constrained, but needs it to stay above 7 per cent to generate enough jobs.

Output reduces worries

"The industrial situation in August reduced my worries," Zhang said.

According the statistics bureau, cement output in August was up 9.4 per cent from a year earlier, slower than July's rise of 11 per cent.

But steel production jumped 22.9 per cent, continuing to accelerate after an 18.5 per cent rise in July and 17.3 per cent rise in June.

Car production was 386,000 vehicles in August, up 3.6 per cent from a year ago, and down from the 5.4 per cent growth for July and 20.4 per cent growth for June.

Industrial output is an important indicator for the gross domestic product(GDP), Niu said.

China's industrial output grew 17 per cent last year, and its GDP grew 9.1 per cent.

During this half of the year, industrial output grew a year-on-year 17.7 per cent and the country's GDP 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 and fast growth, while economic efficiency was improved continuously, he said.

Uncertainties and unhealthy factors existing in economic performance have also been placed under initial control.

However, 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.

The energy and transportation bottlenecks and rapid growth in fixed asset investments in some sectors are still troubling, he said.

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