Rising at its slowest pace in over a decade last month, China's industrial output grew by 5.4% in November from a year earlier, the National Bureau of Statistics said. This marks the fifth consecutive month of slowing growth and well off the year's peak of 17.8% in March.
"The sharper-than-expected economic slowdown will definitely lead to overcapacity and rising pressures on unemployment... resulting in quite serious deflation in the country next year," said Xing Ziqiang, an economist with China International Capital Corp.
Xing and other economists said the November rise was the lowest for a non-holiday month since China began releasing monthly industrial output data in the mid 1990s. In the first 11 months of the year, industrial output increased by 13.7% from the same period in 2007, according to the National Bureau of Statistics.
Reflecting the impacts of weakening overseas demand, the statistics bureau said that exports of industrial products dropped by 5.2% from November 2007. "There are two main reasons -- export decline and inventory reduction," said Wang Qing, an economist with Morgan Stanley in Hong Kong.
China produced just 714,000 vehicles last month, down by 15.9% from a year earlier.
The production of pig iron, crude steel and rolled steel declined by 16.2%, 12.4% and 11% respectively.
In one of the clearest signals that the global crisis was increasingly hurting China's economy, the government said last week that exports fell by 2.2% in November, the first decline in more than seven years. China's inflation rate also slowed to a 22-month low of 2.4% in November, leading to predictions of deflation despite enormous government efforts to boost domestic consumption. Beijing has taken a number of measures, including four interest rate cuts since September and a $586 billion stimulus package, to boost domestic demand in an effort to cope with the global downturn.
Nevertheless, economic growth is expected to be well down on the 11.9% recorded last year. The economy grew at only 9% in the third quarter, and the data out for November has all but ensured the fourth-quarter numbers will be much lower.
Copyright Agence France-Presse, 2008