China Factory Production Rose 14.8 Percent in Jan. (Update4)
By Chi-Chu Tschang
quote.bloomberg.com
Beijing, Feb. 18 (Bloomberg) -- China's industrial production rose in January, outpacing the government estimate for 2003, as a growing middle class bought more cars and mobile phones.
Production grew 14.8 percent from a year earlier, following a 14.9 percent rise in December, the National Bureau of Statistics said in a statement. The State Economic Trade Commission forecasts it will rise by about a tenth this year.
``It is very encouraging that the growth was in high-end products such as mobile phones and electronics,'' said Gloria Ho, an economist with Bank of East Asia in Hong Kong. ``Mainland industry is moving up the value-added chain.''
As China grows at the fastest pace of any major Asian nation, incomes and spending are rising, fuelling demand for Volkswagen AG's cars and TCL Mobile Communications Co.'s mobile phones. Retail sales last year rose 8.8 percent for the country as a whole, with urban spending increasing 10.8 percent.
Gains in last month's production were driven by increased manufacturing of vehicles and telecommunications equipment, the statement said. Auto production rose by more than half to 325,000 units last month, close to last year's high. Production of mobile phones, computers, integrated circuits and electronic parts grew as much as four-fifths from a year earlier.
China's largest mobile phone manufacturer, TCL Mobile, saw its handset sales quadruple from a year earlier to 911,754 in December. TCL said it is targeting a four-fifths increase in sales this year to 9 million units. The company will announce its January sales figures at the end of this week.
Foreign Manufacturers
Also, more and more companies from the U.S., Europe, Japan and Taiwan are building and expanding factories in China to take advantage of low wage costs and sell their products to the nation's 1.3 billion people. Foreign direct investment rose 13 percent to $52.7 billion last year.
Volkswagen, Europe's largest carmaker, said it sold more than half a million cars in China last year and aims to sell in excess of 600,000 this year. The company said it plans to invest an average 600 million euros a year in China until 2007, by which time it expects to be selling a million cars a year there.
Car production in China rose 38 percent last year, according to industry consultant Automotive Resources Asia, and it is not just foreign companies expanding.
Zhejiang-based China Geely Group doubled its car production to 43,475 units during the year and said it plans to increase capacity at its plant in Ningbo, Zhejiang province to 150,000 units a year by 2005. The private automaker also plans to build a 300,000-unit-a-year factory in Taizhou, Zhejiang province and has plans to sell its models overseas.
``All our cars are sold domestically but we're in the preparation stages to export.'' said Tom Chen, director of Geely's international cooperation department.
China's exports last year rose more than a fifth to $325.6 billion, helping the economy grow 8 percent. |
