Productive spurt puts economy in 'overdrive'
By Wang Yanlin |
March 12, 2010, Friday
|
Print Edition
Print Edition
CHINA'S economy grew even more bullish in February, with rising industrial production, investments, retail sales and trade.
However, the approval of new loans dropped sharply and consumer and producer prices advanced more than expected to a 16-month high, igniting inflation fears.
Government officials dispelled the worries that China's economy may be overheating, while analysts said the country should brace for the exit of stimulus measures and more tightening policies.
"China's economy is healthy, not overheating," Sheng Laiyun, a spokesman for the National Bureau of Statistics, said yesterday.
"Some economic indicators are growing fast indeed, but it is on a low comparative base with last year. To grow at this pace shows the foundation of China's recovery is solid."
Industrious time
Industrial production rose 20.7 percent from a year earlier in the first two months, up 16.9 percentage points from the same period of 2009 and 2.2 percentage points from December, the bureau said.
It did not provide monthly figures for the first two months due to the influence of the Spring Festival break.
Urban fixed-asset investment jumped 26.6 percent on an annual basis to 1.3 trillion yuan (US$190.44 billion) in the January-February period, compared with an increase of 26.5 percent a year ago.
Investment in property development gained 31.1 percent to 314.4 billion yuan.
Retail sales advanced 17.9 percent year on year in the first two months to 2.5 trillion yuan, 2.7 percentage points more than a year earlier.
With economic changes becoming more entrenched in coming months, Sheng said China's statistics would start to look "more normal."
Rates call
The consumer price index, a main gauge of inflation, jumped 2.7 percent from a year earlier last month, up from an increase of 1.5 percent in January.
The producer price index, which measures factory-gate inflation, climbed 5.4 percent year on year, the highest since November, 2008, and compared with the advance of 4.3 percent in January.
Li Maoyu, an analyst at Changjiang Securities Co, said the sharp increase in prices may spur the government to consider a tightening policy stance and the withdrawal from the economic stimulus package.
"Price increases in February exceeded our expectations, and put the government target of 3-percent inflation this year at risk," Li said.
"To contain inflation and avoid overheating, the government should consider measures, including an increase in interest rates."
China's new loan approvals in February were halved from a month earlier to700.1 billion yuan.
However, the approval of new loans dropped sharply and consumer and producer prices advanced more than expected to a 16-month high, igniting inflation fears.
Government officials dispelled the worries that China's economy may be overheating, while analysts said the country should brace for the exit of stimulus measures and more tightening policies.
"China's economy is healthy, not overheating," Sheng Laiyun, a spokesman for the National Bureau of Statistics, said yesterday.
"Some economic indicators are growing fast indeed, but it is on a low comparative base with last year. To grow at this pace shows the foundation of China's recovery is solid."
Industrious time
Industrial production rose 20.7 percent from a year earlier in the first two months, up 16.9 percentage points from the same period of 2009 and 2.2 percentage points from December, the bureau said.
It did not provide monthly figures for the first two months due to the influence of the Spring Festival break.
Urban fixed-asset investment jumped 26.6 percent on an annual basis to 1.3 trillion yuan (US$190.44 billion) in the January-February period, compared with an increase of 26.5 percent a year ago.
Investment in property development gained 31.1 percent to 314.4 billion yuan.
Retail sales advanced 17.9 percent year on year in the first two months to 2.5 trillion yuan, 2.7 percentage points more than a year earlier.
With economic changes becoming more entrenched in coming months, Sheng said China's statistics would start to look "more normal."
Rates call
The consumer price index, a main gauge of inflation, jumped 2.7 percent from a year earlier last month, up from an increase of 1.5 percent in January.
The producer price index, which measures factory-gate inflation, climbed 5.4 percent year on year, the highest since November, 2008, and compared with the advance of 4.3 percent in January.
Li Maoyu, an analyst at Changjiang Securities Co, said the sharp increase in prices may spur the government to consider a tightening policy stance and the withdrawal from the economic stimulus package.
"Price increases in February exceeded our expectations, and put the government target of 3-percent inflation this year at risk," Li said.
"To contain inflation and avoid overheating, the government should consider measures, including an increase in interest rates."
China's new loan approvals in February were halved from a month earlier to700.1 billion yuan.
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