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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (1379)	11/12/2003 1:29:13 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

As its factories pick up speed, China aids a global recovery Thomas Crampton IHT Tuesday, November 11, 2003 HONG KONG China on Monday reported a surge in industrial production for October, underscoring a trend of torrid growth in Asia's second-largest economy. . Industrial production in October was 17.2 percent higher than a year earlier, the government said. Although economists caution that official data may be heavily revised later on, the production figure highlighted the power of China's economy. . "The Chinese economy is absolutely red hot," said Dong Tao, chief regional economist at Credit Suisse First Boston in Hong Kong. "This is great news for the world economy and people selling machinery or iron ore to China." . The government has reported economic growth of 8.5 percent in the first nine months of this year, and analysts said they expected a similar rate of expansion for the full year. . "When China accelerates, the world follows," Tao said. "When China slows down, the world will hurt." He added, "China is no longer just another emerging-market economy." . These sentiments were echoed in Bangkok, where central bankers from the world's most industrialized nations met. . "China, being an important part of the global economy and experiencing very rapid and profound transformations, was certainly examined as part of the global economy," said Jean-Claude Trichet, president of the European Central Bank and current chairman of the group of central-bank officials from the world's richest industrial nations: Belgium, Britain, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland and the United States. . Trichet credited Asia with helping accelerate global growth at a faster pace than many economists and policy makers had expected. "Asia's economy, being one of the major sources of global growth, is experiencing intraregional trade, which is reflecting the domestic demand that is strongly accelerating and improving in various economies in Asia," he said. . Trichet added that the bankers were confident that growth in China would accelerate. "We have very much confidence at the global level that growth is picking up and that recovery is gaining momentum," he said. . Although China has grown to the sixth-largest economy in the world and the single largest swing factor for a raft of global commodities, Tao and other economists have warned that rapid growth will eventually undermine itself. Analysts also cautioned that the rapid industrial expansion signaled a glut of investment that could backfire. . "Money has been flowing around so fast that we are eventually looking at an investment fiasco," Tao said. "Huge amounts of capacity will come online in about five years, prompting a deflationary situation." . While companies have been determined to pump further resources into developing their businesses, Beijing has signaled caution about the pace of growth, Tao added. Yet despite the rapid growth, China has maintained one of the lowest levels of inflation in Asia. Consumer prices increased just 1.1 percent in September from a year earlier. . International Herald Tribune iht.com