Pleasant surprise for China; factory output growth rebounds to 9.7%
11 Aug 2013 4:35 AM IST
China stunned its Western rivals by achieving the fastest factory production growth this year during the month of July. Factory output rose 9.7 per cent in July from a year earlier, the fastest growth since output grew 9.9 per cent over January and February, China’s National Bureau of Statistics data showed. The surprisingly good figures pushed up China's CSI300 stock index by 0.4 per cent, to help it achieve its best weekly gain in a month. China’s annual consumer inflation was 2.7 per cent in July.
The latest good news from the world’s second largest economy, which the USA and Great Britain have gone all out to destabilise through political, military and other non-economic methods, comes after a string of good economic news over the past few weeks. It also further reinforces the view that the Asian dragon may well be on its way back to super-growth, combined with financial stability.
For the past few years the Western media has been creating a lot of hype over China’s ‘decelerating economy’ and ‘industrial slowdown’. According to new agency reports, a steadying economy would be a relief to China's Communist leaders, who fear that a further slowdown would derail their efforts to rebalance the economy away from its credit and investment-driven growth model to one in favour of consumption.
The Chinese government has made it clear that it will accept some slowdown as it pushes through its reforms but has also expressed confidence of meeting its 7.5 per cent growth target this year which would be the Asian giant’s slowest growth in 23 years, the agency reports added. Premier Li Keqiang has said that economic policy would not change if growth holds above 7 per cent.
Loans and other money data released on Friday indicate that China did not ease monetary conditions last month, in line with its central bank's hawkish stance, with particular regard to house price inflation, the reports added. Banks gave 699.9 billion yuan loans in July, which is higher than the figure forecast but down from the June numbers.
Bank lending is the highlight of Communist China's tightly controlled monetary policy as it is the government that tells banks how much to lend and they have next to no autonomy.
Chinese exports, too, rose 5.1 per cent in July from a year ago, a huge leap from the first fall in 17 months in June, and imports jumped 10.9 per cent as the Asian economic giant shipped home record amounts of some commodities, the reports informed. However, the import data was partly inflated by delayed shipments and unprocessed deals from June, companies rebuilding stocks after a lull and new companies entering the business, the reports cautioned.
The factory data shows that power production increased by 8.1 per cent in July from a year ago, up from June's growth, while the volume of crude oil processed by China’s refineries rose 7.1 per cent, down from June's 11 per cent growth rate.
This power output includes electricity generated but lost through inefficient grids. China’s power consumption, on the other hand, has fallen steadily and the July numbers will be announced later this month, the reports added.
Although the volume of crude oil processed in refineries is a gauge of final demand, China does not publish consumption data for diesel, the main fuel for vehicles and for which demand has declined substantially as the economy has cooled.
However, the reports warn, concerns about the reliability of Chinese economic and business data have seen analysts look to indicators such as box office receipts and salt consumption for clues on how the level of activity. Such measures, too, prove consistent with Beijing's line that the Chinese economy has slowed but not as dramatically as some had fear.
The country’s automobile sector, a key barometer of manufacturing performance, is displaying rugged resilience. Vehicle sales increased by 9.9 per cent in July from a year ago, down from June but steady within a trend seen in the past year. Companies in various sectors, too, are reporting upbeat sales. Luxury Italian fashion house Prada said that its China performance has helped lift global sales by 12 per cent in the six months to July.
The latest good news from the world’s second largest economy, which the USA and Great Britain have gone all out to destabilise through political, military and other non-economic methods, comes after a string of good economic news over the past few weeks. It also further reinforces the view that the Asian dragon may well be on its way back to super-growth, combined with financial stability.
For the past few years the Western media has been creating a lot of hype over China’s ‘decelerating economy’ and ‘industrial slowdown’. According to new agency reports, a steadying economy would be a relief to China's Communist leaders, who fear that a further slowdown would derail their efforts to rebalance the economy away from its credit and investment-driven growth model to one in favour of consumption.
The Chinese government has made it clear that it will accept some slowdown as it pushes through its reforms but has also expressed confidence of meeting its 7.5 per cent growth target this year which would be the Asian giant’s slowest growth in 23 years, the agency reports added. Premier Li Keqiang has said that economic policy would not change if growth holds above 7 per cent.
Loans and other money data released on Friday indicate that China did not ease monetary conditions last month, in line with its central bank's hawkish stance, with particular regard to house price inflation, the reports added. Banks gave 699.9 billion yuan loans in July, which is higher than the figure forecast but down from the June numbers.
Bank lending is the highlight of Communist China's tightly controlled monetary policy as it is the government that tells banks how much to lend and they have next to no autonomy.
Chinese exports, too, rose 5.1 per cent in July from a year ago, a huge leap from the first fall in 17 months in June, and imports jumped 10.9 per cent as the Asian economic giant shipped home record amounts of some commodities, the reports informed. However, the import data was partly inflated by delayed shipments and unprocessed deals from June, companies rebuilding stocks after a lull and new companies entering the business, the reports cautioned.
The factory data shows that power production increased by 8.1 per cent in July from a year ago, up from June's growth, while the volume of crude oil processed by China’s refineries rose 7.1 per cent, down from June's 11 per cent growth rate.
This power output includes electricity generated but lost through inefficient grids. China’s power consumption, on the other hand, has fallen steadily and the July numbers will be announced later this month, the reports added.
Although the volume of crude oil processed in refineries is a gauge of final demand, China does not publish consumption data for diesel, the main fuel for vehicles and for which demand has declined substantially as the economy has cooled.
However, the reports warn, concerns about the reliability of Chinese economic and business data have seen analysts look to indicators such as box office receipts and salt consumption for clues on how the level of activity. Such measures, too, prove consistent with Beijing's line that the Chinese economy has slowed but not as dramatically as some had fear.
The country’s automobile sector, a key barometer of manufacturing performance, is displaying rugged resilience. Vehicle sales increased by 9.9 per cent in July from a year ago, down from June but steady within a trend seen in the past year. Companies in various sectors, too, are reporting upbeat sales. Luxury Italian fashion house Prada said that its China performance has helped lift global sales by 12 per cent in the six months to July.
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