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September 12, 2009

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Home » Business » Economy

Industrial output grows faster

THE fastest rate of power production this year and booming car sales drove China's industrial output at a faster-than-expected pace last month, indicating a continuing recovery in the world's third-largest economy.

Fixed-asset investment in the first eight months also beat forecast, buoyed by property development, which accounted for 25 percent of the total.

Industrial production gained 12.3 percent last month from a year earlier, compared with a 10.8 percent increase in July and a 10.7 percent growth in June, the National Bureau of Statistics said yesterday.

The growth was stronger than a market consensus of 11.8 percent.

"China's economic recovery continued, challenging investor pessimism about the economy based on a worse-than-expected performance in July," said Li Xunlei, an analyst at Guotai Jun'an Securities Co.

Last month, electricity output jumped 9.3 percent to 344.3 billion kilowatt-hours. Automobile production surged 90 percent to 1.17 million units, and steel production surged 22 percent to 523.3 million tons.

"Steel prices accelerated in mid-July, spurring record output in August, but high inventories have led to a price decrease that may feed through to reduced output," said Yuan Yi, an analyst at Shenyin and Wanguo Securities Co.

Urban fixed-asset investment jumped 33 percent to 11.3 trillion yuan (US$1.65 trillion), bolstered by strong growth in real estate, the statistics bureau said. The rise followed a 32.9 percent gain in the first seven months and beat a market consensus forecast of a 32.7 percent gain.

Bureau spokesman Li Xiaochao said the economic data for the first eight months keep the country on track to achieve its 8 percent growth target this year. He said he is confident that fixed-asset investment through the end of this year will grow at a stable pace.

Boosted by a buoyant property market, real estate investment surged 34.6 percent last month, up from 19.6 percent in July.

"With the pace of property sold exceeding property constructed, we forecast property-related construction and investment to be strong in the next few quarters," said Peng Wensheng, head of China research at Barclays Capital.


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