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Industrial output grows less than 2007

CHINA'S industrial output rose 12.9 percent year on year in 2008, or 5.6 percentage points less than the previous year, the National Bureau of Statistics said yesterday.

Output climbed 5.7 percent in December, up slightly from the 5.4-percent growth rate in November. However, the December figure was 11.7 percentage points lower than a year earlier, and it was also much lower than any of the first 10 months of 2008.

Output of state-owned enterprises and shareholding companies rose 9.1 percent and 15 percent, respectively. These figures include companies with annual sales of at least 5 million yuan (US$731,283), the point at which companies in China are classified as medium to large-scale.

Output of companies funded by foreign investors or investors from Hong Kong, Macau and Taiwan rose 9.9 percent.

Heavy industrial output rose 13.2 percent, while that of light industry gained 12.3 percent.

The bureau's data showed aggregate industrial profits hit 2.4 trillion yuan in the first 11 months of last year, up 4.9 percent compared with the same period in 2007. However, the growth rate fell a sharp 31.8 percentage points from a year earlier.

Of 39 industries surveyed, 31 reported year-on-year profit growth. The five fastest growth rates were recorded by petroleum and natural gas extraction, coal mining, transport equipment manufacturing, chemical production and metals processing.

Industrial production growth slowed along with a weakening global economy, which reduced market prices as well as domestic and foreign demand, analysts said.

"Weakening demand, especially overseas, was a major cause of China's slowdown, as more than 30 percent of GDP comes from trade-related industries," said Tang Min, deputy secretary of the China Development Research Foundation.

He forecast the economy would begin to improve in the second or third quarter as a national 4-trillion-yuan stimulus package took effect and boosted domestic demand for industrial products.

Ma Jiantang, the bureau's head, called the December rebound a "positive sign" for China's industrial production.

"The growth rate of industrial output was 0.3 percentage point higher than November. Small as it is, it's an important change in industrial activity" and could help China's economy to rebound, he said.

Ma said 16 of the 39 industries surveyed had shown a month-on-month rise in output growth.

A survey conducted by the bureau earlier this month showed steel, coal, ferrous metal and chemical product prices began to rebound after prolonged declines during the second half of 2008, Ma said.


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