china's ip rose 16%

  1. 3,412 Posts.
    Industrial output rises 16pc on strong car and steel sales

    China's industrial production rose 16 percent in August, led by cars and steel, as companies including Honda Motor and Baoshan Iron & Steel expanded.

    Thursday, September 15, 2005

    China's industrial production rose 16 percent in August, led by cars and steel, as companies including Honda Motor and Baoshan Iron & Steel expanded.
    The increase beat the median 15.7 percent forecast in a Bloomberg News survey of eight economists and followed a 16.1 percent gain from a year earlier in July. Car production jumped 46 percent and output of steel products surged 28 percent, the National Bureau of Statistics said Wednesday on its Web site.

    Industrial expansion in the world's fastest-growing major economy, which has grown by more than 9 percent for eight straight quarters, is helping Premier Wen Jiabao achieve his goal of creating nine million new jobs this year. Reports this week showed inflation cooled in August, retail sales were the third largest on record and exports surged to an all-time high.

    "Production growth is being driven by strong export demand and rising consumer spending at home," said Ben Simpfendorfer, China economist at JPMorgan Chase in Hong Kong. "There will be some moderation in the fourth quarter because of slower investment growth and some temporary weakness in US demand."

    Simpfendorfer predicts production growth will slow to between 15 and 16 percent by the year end, while Goldman Sachs economist Hong Liang forecasts the pace will moderate to as little as 14 percent. In the first eight months, industrial output rose 16.3 percent to 4.4 trillion yuan (HK$4.24 trillion), Wednesday's report showed.

    Production in China, the world's seventh-largest economy, is expanding five times faster than that of the United States and double the rate of India's output. The value of China's industrial output last month amounted to 597 billion yuan, the second-highest total on record.

    Honda's joint venture with Guangzhou Automobile Industry Group sold 26 percent more cars in August. The Japanese automaker started exporting Chinese-made Jazz compact cars to Europe in June.

    China, which has doubled steel output in four years, may increase production of the metal by another 22 percent to 332 million tons this year, the China Iron & Steel Association said.

    Baoshan Iron, which supplies 47 percent of China's auto steel and 52 percent of its household-appliance steel, reported a 72 percent rise in sales in the first half.

    The central government cracked down on an investment boom last year after it caused power shortages and transport bottlenecks, a move that came too late to prevent oversupply developing in industries including steel and cement. Prices are now falling as domestic demand and exports aren't rising fast enough to absorb the new capacity.

    BLOOMBERG

 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.