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Mixed data indicate slower city growth
By Wang Yanlin |
June 17, 2010, Thursday
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Online Edition
Online Edition
SHANGHAI showed further signs of a cooling economy in May with moderating growth rate in industrial production and investment. But exports rebounded strongly and consumer prices continued to rise, making policy changes difficult.
The data released today painted a mixed economic picture, analysts said. They suggested policy makers should be more careful in their efforts to tighten credit, which may hurt the slower rate of growth.
Li Maoyu, an analyst at Changjiang Securities Co, said the exit of the stimulus measures should be gradual and it is important to guarantee existing projects should get the funds they need until they are finished.
"With less investment, the economy will rely more on people's consumption to drive up growth," Li said. "It is natural to reduce investment when the whole world is considering a retreat from stimulus plans. But for existing projects, we should make sure their source of funds is stable."
In the first five months, Shanghai's fixed asset investment rose 5.6 percent from a year earlier to 174.7 billion yuan (US$25.6 billion), the statistics bureau said today. It compared with the rise of 11 percent through April.
Shanghai's industrial production rose 24.6 percent on an annual basis to 243.4 billion yuan last month, slower than the pace of 26.2 percent in April and 28.2 percent in March.
However, rising consumer prices sent a signal for more tightening policies. The Consumer Price Index, the main gauge of inflation, increased 3.2 percent in May, higher than the rise of 2.6 percent in April and stronger than the national figure of 3.1 percent for last month.
"It is subtle to balance when prices are growing but production has already slowed down," Li said.
The surging trade value and increasing retail sales also suggested that economic growth remains robust.
Exports climbed 48.1 percent annually to US$14.7 billion last month, a record high this year, and imports rose 51 percent to US$15.4 billion, making May the third consecutive month for Shanghai to post a trade deficit.
Retail sales, boosted by people's consumption during World Expo 2010, advanced 18.9 percent from a year earlier to 51.2 billion yuan. It further accelerated from the increase of 16.5 percent in April.
The data released today painted a mixed economic picture, analysts said. They suggested policy makers should be more careful in their efforts to tighten credit, which may hurt the slower rate of growth.
Li Maoyu, an analyst at Changjiang Securities Co, said the exit of the stimulus measures should be gradual and it is important to guarantee existing projects should get the funds they need until they are finished.
"With less investment, the economy will rely more on people's consumption to drive up growth," Li said. "It is natural to reduce investment when the whole world is considering a retreat from stimulus plans. But for existing projects, we should make sure their source of funds is stable."
In the first five months, Shanghai's fixed asset investment rose 5.6 percent from a year earlier to 174.7 billion yuan (US$25.6 billion), the statistics bureau said today. It compared with the rise of 11 percent through April.
Shanghai's industrial production rose 24.6 percent on an annual basis to 243.4 billion yuan last month, slower than the pace of 26.2 percent in April and 28.2 percent in March.
However, rising consumer prices sent a signal for more tightening policies. The Consumer Price Index, the main gauge of inflation, increased 3.2 percent in May, higher than the rise of 2.6 percent in April and stronger than the national figure of 3.1 percent for last month.
"It is subtle to balance when prices are growing but production has already slowed down," Li said.
The surging trade value and increasing retail sales also suggested that economic growth remains robust.
Exports climbed 48.1 percent annually to US$14.7 billion last month, a record high this year, and imports rose 51 percent to US$15.4 billion, making May the third consecutive month for Shanghai to post a trade deficit.
Retail sales, boosted by people's consumption during World Expo 2010, advanced 18.9 percent from a year earlier to 51.2 billion yuan. It further accelerated from the increase of 16.5 percent in April.
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