China's Industrial Output Slows For Second Consecutive Month

Showing a year-on-year increase of 15.7% after months of breakneck gains China's industrial output growth slowed for a second consecutive month in August, official figures showed Sept. 13. The figures came as other recent measures of the Chinese economy, most importantly investment in fixed assets, also suggested a slowdown as a result of government efforts to rein in runaway growth.

The figure for industrial output, a key measure of economic activity in the world's fourth-largest economy, was down from 16.7% in July and 19.5% in June. Likewise, fixed-asset investment slowed abruptly to 21.5% growth in August from 27.4% in July.

All of this is seen by some analysts to be the result of government efforts over the past months to avert overheating in key economic sectors by curbing massive lending by the banks. In the second quarter of the year, China's economy expanded by 11.3 %.

While industrial output may or may not be easing, it appeared from Sept. 13's figures to still be fueled mainly by China's two top drivers of economic growth -- exports and investment. Exports of industrial products increased 23.9% in August, the National Bureau of Statistics said in a statement.

Industrial enterprises also remained suppliers of input essential for construction, despite a slew of government measures aimed specifically at bringing the highly speculative real estate market to heel. Production of cement, a key construction industry input, was up 21.3% in August from a year earlier, while steel, another key component, rose 17%, the statistics bureau said.

Copyright Agence France-Presse, 2006

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