China’s Industrial Output Rises 12.3% as Recovery Strengthens
By Bloomberg News
Sept. 11 (Bloomberg) -- China’s industrial production grew at a faster pace in August, signaling a strengthening recovery in the world’s third-biggest economy.
Output gained 12.3 percent from a year earlier, after climbing 10.8 percent in July, the statistics bureau said at a briefing in Beijing today. That compared with the 11.8 percent median estimate of 15 economists surveyed by Bloomberg News.
A 4 trillion yuan ($585 billion) stimulus package, record lending and a rebound in property investment and sales have countered an export slump, helping China lead Asia’s recovery from the global recession. Premier Wen Jiabao said yesterday that the government “cannot and will not” pull back from stimulus measures.
“The recovery is becoming more entrenched,” said Peng Wensheng, an economist with Barclays Capital in Hong Kong.
The Shanghai Composite Index has tumbled about 15 percent from this year’s Aug. 4 high because of a slowdown in credit growth after a record $1.1 trillion of new loans in the first half.
“The biggest challenge now is how to guide monetary and credit policy to a prudent level without impacting the property and stock markets and the economic recovery,” said Isaac Meng, a senior economist at BNP Paribas SA in Beijing.
Urban fixed-asset investment for the eight months to Aug. 31 climbed 33 percent, the statistics bureau said. That was more than a 32.9 percent gain through July and the 32.7 percent median estimate in the survey of economists.
Retail-Sales Growth Accelerates
Retail sales rose 15.4 percent in August from a year earlier after a 15.2 percent increase in the previous month.
Surging auto sales are aiding the nation’s recovery. Hyundai Motor Co., South Korea’s largest carmaker, said yesterday that it will raise annual production capacity at its Chinese venture next year to 600,000 vehicles from 500,000. General Motors Co., the biggest overseas automaker in China, says the nation’s vehicle sales may reach 12 million this year, surpassing the U.S. as the world’s No. 1 market.
“Asia is recovering faster from the economic downturn than other regions, in part thanks to China’s gravitational pull,” European Union Trade Commissioner Catherine Ashton said in Beijing on Sept. 9.
China’s gross domestic product may increase 8.3 percent in 2009 and 9.5 percent in 2010, according to a Bloomberg survey of economists conducted the week ended Aug. 28.
Consumer prices fell -1.2 percent last month from a year earlier, declining for a seventh month and giving the central bank more room to keep interest rates at a four-year low to stoke growth. Producer prices dropped 7.9 percent compared with a record 8.2 percent fall last month.
Inflation Alert
Wen said yesterday that the government was on alert for inflation returning.
China will increase interest rates “around next spring” when inflation will climb to as high as 5 percent, economist Meng said. Inflation will rise to 1 percent toward the end of this year and for the whole of next year will average 3.9 percent, he added.
A rebound in the property market has added to signs that the recovery is maintaining momentum.
Investment in real-estate development grew 14.7 percent in the first eight months after an 11.6 percent gain in the first seven months, the statistics bureau said yesterday. House prices in 70 cities rose 2 percent in August, the fastest gain in 11 months.
Drags on growth include overcapacity in manufacturing, falling exports and elevated unemployment.
The government said Sept. 9 that unemployment is a “grave” concern even after improvements in the past three months, underscoring the need to promote economic growth to create jobs and preserve social stability as the Communist Party prepares to celebrate 60 years of rule on Oct. 1.
The urban jobless rate of 4.3 percent understates unemployment because it doesn’t include migrant workers.
Best Rgds;
IMHO...............Incidentaly the US has yesterday announced a 21-31 % Tariff on Chinese
imported Steel Tubular Pipe. used mostly in Oil field.This supports US
Steel company Lobby, and was Rigerously oppossed by Chinese Lobby.fwiw
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