China's Factory Production, Exports Surged in July (Update4)
Aug. 11 (Bloomberg) -- China's industrial production rose by about a sixth in July, as companies such as Kia Motors Corp. and Siemens AG make more cars and cell phones to meet surging demand at home and abroad.
Production, which accounts for about a third of the nation's gross domestic product, rose 16.5 percent from a year earlier to 341 billion yuan ($41.2 billion), the National Bureau of Statistics said in a statement in Beijing.
Rising production is helping drive growth in the world's sixth-largest economy and creating jobs for some of the eight million Chinese who join the nation's workforce each year. China's economy grew 8.2 percent in the first half of this year, the fastest pace in North Asia.
``Every car maker is expanding in China as the car market grows at an average of 50 percent every month,'' said Gu Qun, who tracks carmakers at Automotive Resources Asia Ltd., an industry consultant, in Shanghai. ``It makes sense for Kia to expand because its existing plant in Yancheng is approaching full capacity.''
South Korea's Kia Motors, an affiliate of Hyundai Motor Co., will invest $600 million with two Chinese companies to build a second car assembly plant in eastern China, said an executive of one of the partners. Kia wants a factory that can produce as many as 400,000 passenger cars a year, said Huang Shi, sales and marketing manager of Dongfeng Yueda Kia Motors Co.
Cell Phones
China's auto production surged by about two-fifths in July to 341,000 vehicles, about half of which were passenger cars, today's statement said. Electronics and computer production rose 77 percent in July and cell phone production increased 65 percent.
Siemens, the world's fourth-largest maker of mobile phones, said it plans to invest $30 million in its Shanghai unit, boosting annual production capacity there to 14 million handsets from 10 million currently.
``Siemens is expanding because there is good market demand and also we have good facilities and manpower in Shanghai,'' said Wang Chuandong, Siemens spokesman in Beijing. The cell phones Siemens makes in Shanghai are sold in China, Southeast Asia, India, and Europe, he said.
China's January-July exports rose a third to $228 billion, the state-owned People's Daily newspaper said, without providing figures for July alone. Chinese economic statistics are often released via official media.
Exports
Huawei Technologies Co., China's largest maker of computer- networking equipment, said exports rose 70 percent to $350 million in the first half due to growing demand in Thailand, Russia and Latin America. Huawei exports to roughly 40 countries.
``Export growth plays a big role in pulling up industrial production,'' said Zhou Keyu, an economist at Guotai Junan Securities in Shanghai. He estimates factory production growth will average 15 percent ``for at least the next year.''
The median forecast in a Bloomberg News survey of five economists was for industrial production to have increased 16.1 percent in July after rising 16.9 percent the previous month.
Exports in July rose 31 percent to $38.1 billion and imports climbed 35 percent to $36.5 billion, according to Bloomberg News calculations.
Last Updated: August 11, 2003 05:10 EDT
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