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Soft landing seen for China's economy
(Reuters)
Updated: 2005-08-03 06:24
A Commerce Ministry survey painted the picture of an economy in which
completed investments are rapidly coming on stream just as demand weakens
marginally.
Looking at 300 kinds of production materials, such as coal, steel and cement,
the survey found that only 7 percent of them would have higher demand than
supply in the second half of the year, the China Securities Journal cited the
survey as saying.
The proportion in the first half of the year was 23 percent.
Power switch
Economists said the sharp slowdown in China's oil import
growth was partly explained by the growing availability of coal, fewer shipping
bottlenecks and weakening energy demand in general.
The Commerce Ministry's survey showed China was likely to have a crude oil
shortfall this year of 2.6 million barrels per day. That implied a 6 percent
increase in crude imports this year, well down from last year's 35 percent
surge.
Xie said China's need to import petroleum products to produce electricity was
vanishing as its generating capacity -- 83 percent based on coal and 15 percent
on hydro -- caught up with demand, reducing the need for factories to run diesel
generators.
Indeed, capacity under construction was so vast that China could find itself
with a power-generating surplus as early as next year. "We believe China's
overall imports of crude and petroleum products will decline in both 2005 and
2006," he said.
Because inputs are increasingly plentiful, the Commerce Ministry's survey
expects annual price inflation for production materials will slow sharply to
just 4 percent for the whole year from a rate of 13.6 percent in the first half.
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