China slows in Feb....................................................
scmp.com
WednesdayÿÿMarch 11ÿÿ1998
Mainland output growth slips to 4.9pc in February
WANG XIANGWEI and agencies in Beijing
The mainland's benchmark industrial output rose a year-on-year 4.9 per cent last month, one of the lowest monthly growth rates in recent years.
The figure, much lower than expected, is likely to heighten concerns about the health of the mainland economy and prompt calls for Beijing to introduce measures to stimulate growth.
"This has come as a surprise even when the factor of public holidays is taken into consideration, " Standard Chartered Bank senior economist Liao Qun said.
"Last month's output growth should have been higher on a year-on-year . . . basis as the Lunar New Year holidays fell in January this year and February last year."
The figures darkened an already cloudy picture for the mainland economy, which has so far escaped the worst of Asia's financial crisis.
In the first two months of this year, industrial output rose 8 per cent, down 2.4 percentage points from the same period last year and 2.8 points less than the fourth quarter, the State Statistical Bureau said yesterday.
Economists said if the low growth rate was sustained, it would call into doubt Beijing's pledge to achieve an 8 per cent gross domestic product growth rate for this year.
Mr Liao said to achieve that target would require an industrial output growth rate of at least 10 per cent.
Last year, the mainland's GDP rose 8.8 per cent while industrial output rose 11.1 per cent in nominal terms.
The bureau blamed the slow-down in industrial output on longer public holidays and the reforms of state firms which had been cutting production to clear inventories.
Slower production growth at state enterprises and collective firms - both of which were 2.7 percentage points off last year's pace - shaved one and 0.7 percentage points off the national output growth respectively, the statistics bureau said.
Output at state firms and those in which the state has a majority stake rose 3.6 per cent in the first two months, compared with 6.3 per cent in the same period last year.
Output by collectively owned firms rose 7.8 per cent, against last year's 10.5 per cent increase.
The bureau said of the more than 160 manufactured items measured during the period, 38 per cent of consumer goods and 45 per cent of inputs posted year-on-year output decreases.
It said the textile sector was down 7.4 per cent in the first two months as Beijing attempted to reform the industry by closing many of the loss-making firms.
Economists said although Beijing had dismissed concerns the economy was sliding into deflation, the figures suggested otherwise.
Coupled with falls in industrial output and retail sales, the benchmark retail price index fell for a fifth month in a row last month.
Mr Liao expected Beijing to come up with economic stimulation packages later this year, with more money to be pumped into infrastructure projects.
Dai Xianglong, the central bank governor, said over the weekend that Beijing would increase fixed asset investment to boost the economy. |
