Full speed ahead in China
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Production is up, but growth is slowing in China's car plants.
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BEIJING, China (Reuters) -- China's factories hit their fastest growth rate in eight months in October as sectors such as electronics and machinery kept the world's sixth-biggest economy steaming ahead.
Industrial output in October was 17.2 percent higher than a year earlier, accelerating from the 16.3 percent rise in the year through September, the State Statistical Bureau said in a statement Monday.
It was the fastest clip since an annual 19.8 percent rise registered in February.
But the figures also prompted further fears of overheating.
Factory output, driven by exports and investment, showed the economy grew 9.1 percent between the third quarters of 2002 and 2003.
"I cannot say that China's economy has overheated, but I personally believe the economy has showed some overheating trends," said Chen Xingdong, an economist at BNP Paribas Peregrine.
Factory output "reflected strong demand from investment and exports" but China was unlikely to face high inflation this year and next year, Chen said.
"Prices of many items may go up, but there is no need to worry about hyper-inflation in China," he said, predicting the benchmark consumer price index (CPI) could pick up gradually and rise two to three percent next year.
The central bank expects the average level of the CPI this year will be one percent higher than in 2002. In September it was up 1.1 percent on a year earlier.
On Sunday, statistics bureau chief Li Deshui voiced concern over some price changes, saying dearer food risked angering hundreds of millions of Chinese while cheaper steel and cement could cripple some firms.
Chen said China's economic growth may lose some steam next year as recent steps by the central bank to tighten bank loans and a cut in tax rebates for exporters put the brakes on two crucial engines.
The bureau said the automobile industry, another booming sector that has lifted demand for other industrial goods such as steel and plastic, saw growth slow sharply from the previous month.
Car production was 168,000 vehicles in October, 52 percent more than a year earlier, but that was nearly 18 percentage points slower than the rise in the year through September.
That had a knock-on effect in transport-related industries, the bureau said.
"Feeling the effects of slower automobile output, makers of transportation equipment saw their contribution to industrial output growth fall," it said.
Yet many other sectors roared ahead.
"Looking at pillar sectors, the three major industries of
telecommunications equipment, machinery and metallurgy ... were major forces driving industrial output growth in the month," the bureau said.
Personal computer output in October was twice as great as a year earlier while production of other kinds of computers rose nearly 58 percent.
Output of home appliances such as ovens and microwaves soared more than 50 percent while steel production climbed 25 percent.
Industrial output in the first 10 months was 16.7 percent higher than a year earlier.
Copyright 2003
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
