Steel, power boost industrial growth
By Winny Wang and Richard Fu |
March 12, 2011, Saturday
|
Print Edition
Print Edition
China's industrial production growth accelerated in the first two months of this year, driven by steel and power outputs, the National Bureau of Statistics said yesterday.
Meanwhile, fixed-asset investments gained 24.9 percent through February, faster than the 23.8 percent growth last year, showing signs of continued overheating.
Industrial output rose 14.1 percent from a year earlier, compared with a 13.5 percent increase in December. The growth was higher than market consensus estimates of 13.3 percent.
Heavy industry grew 14.4 percent in the two months, compared with 13.7 percent in December, while light industry grew 13.3 percent, 0.3 percentage point faster, the bureau said.
"Production growth was mostly driven by heavy industries like steel. The jump in power consumption also suggests that metals production is gradually coming back on line despite the energy-saving campaign seemingly still in play," said Yao Wei, an analyst of Societe Generale.
Steel output grew 12.6 percent to 114.18 million tons after a 3.5 percent rise in December and electric power output gained 11.7 percent, compared with a 5.1 percent increase in December, to 677.3 billion kilowatt-hours.
"The growth in power output has rebounded sharply to levels seen at the beginning of the third quarter of last year, reflecting relatively robust economic demand," Shanxi Securities analyst Yi Lei said.
The statistics bureau adjusted the decades-old method it used to measure the country's production and investment indicators starting this year.
The statistical threshold of large industrial enterprises was raised to include only those with an annual business income above 20 million yuan (US$3.04 million), from the previous 5 million yuan.
"The output growth may be overestimated by as much as 0.5 percentage point after the threshold adjustment," said Peng Wensheng, an analyst at China International Capital Co.
For fixed-asset investment data, China will survey projects with total investments of more than 5 million yuan, up from the previous 500,000 yuan, while bringing projects in rural areas into the statistical count.
Sheng Laiyun, a bureau spokesman, yesterday said the adjustment will affect the two indicators by about 1 percentage point.
Fixed-asset investments totaled 1.74 trillion yuan in the period.
Investments in real estate grew 35.2 percent to 425 billion yuan, among which residential housing investments grew 34.9 percent to 301.4 billion yuan.
"Chinese banks lent less to the sector, but there was more funding coming from overseas. Foreign investment in real estate climbed 61.5 percent year on year in the first two months - clearly, the latest set of property tightening measures hasn't bitten yet," Societe Generale's Yao said.
What the analysts say...
Matthew Circosta
Economist at Moody's Analytics
Industrial production continues to defy the recent bout of monetary tightening. A swath of tightening measures have been instituted in recent months, including interest rate increases, hikes in bank reserve ratios and a lower bank lending target for 2011. Yet data for January and February combined show industrial production reaccelerated, even as the Lunar New Year distorted the year on year growth rate.
Li Wei
Economist at Standard Chartered Bank
So far we still have had fairly solid growth in industrial production and investment, though the weakening PMIs and still-tight bank credit mean that we are decelerating mildly. Consumer consumption went down sharply on rising inflationary worries. Thus, we believe that the top policy priority remains fighting inflation. We maintain our forecast of two more interest rate hikes in the first half, with the first one in March. We are also looking for a reserve requirement hike soon to signal the authorities' continued efforts to control liquidity.
Liu Ligang
Economist at ANZ
As the inflationary pressures have yet to abate, we expect the central bank will continue monetary policy normalization in the short term. We expect one more hike in the reserve requirement soon, with the earliest possibility being this weekend. Going forward, China will rely more on interest and exchange rate policies to manage inflation. We expect two more interest rate hikes before the second quarter of 2011.
Meanwhile, fixed-asset investments gained 24.9 percent through February, faster than the 23.8 percent growth last year, showing signs of continued overheating.
Industrial output rose 14.1 percent from a year earlier, compared with a 13.5 percent increase in December. The growth was higher than market consensus estimates of 13.3 percent.
Heavy industry grew 14.4 percent in the two months, compared with 13.7 percent in December, while light industry grew 13.3 percent, 0.3 percentage point faster, the bureau said.
"Production growth was mostly driven by heavy industries like steel. The jump in power consumption also suggests that metals production is gradually coming back on line despite the energy-saving campaign seemingly still in play," said Yao Wei, an analyst of Societe Generale.
Steel output grew 12.6 percent to 114.18 million tons after a 3.5 percent rise in December and electric power output gained 11.7 percent, compared with a 5.1 percent increase in December, to 677.3 billion kilowatt-hours.
"The growth in power output has rebounded sharply to levels seen at the beginning of the third quarter of last year, reflecting relatively robust economic demand," Shanxi Securities analyst Yi Lei said.
The statistics bureau adjusted the decades-old method it used to measure the country's production and investment indicators starting this year.
The statistical threshold of large industrial enterprises was raised to include only those with an annual business income above 20 million yuan (US$3.04 million), from the previous 5 million yuan.
"The output growth may be overestimated by as much as 0.5 percentage point after the threshold adjustment," said Peng Wensheng, an analyst at China International Capital Co.
For fixed-asset investment data, China will survey projects with total investments of more than 5 million yuan, up from the previous 500,000 yuan, while bringing projects in rural areas into the statistical count.
Sheng Laiyun, a bureau spokesman, yesterday said the adjustment will affect the two indicators by about 1 percentage point.
Fixed-asset investments totaled 1.74 trillion yuan in the period.
Investments in real estate grew 35.2 percent to 425 billion yuan, among which residential housing investments grew 34.9 percent to 301.4 billion yuan.
"Chinese banks lent less to the sector, but there was more funding coming from overseas. Foreign investment in real estate climbed 61.5 percent year on year in the first two months - clearly, the latest set of property tightening measures hasn't bitten yet," Societe Generale's Yao said.
What the analysts say...
Matthew Circosta
Economist at Moody's Analytics
Industrial production continues to defy the recent bout of monetary tightening. A swath of tightening measures have been instituted in recent months, including interest rate increases, hikes in bank reserve ratios and a lower bank lending target for 2011. Yet data for January and February combined show industrial production reaccelerated, even as the Lunar New Year distorted the year on year growth rate.
Li Wei
Economist at Standard Chartered Bank
So far we still have had fairly solid growth in industrial production and investment, though the weakening PMIs and still-tight bank credit mean that we are decelerating mildly. Consumer consumption went down sharply on rising inflationary worries. Thus, we believe that the top policy priority remains fighting inflation. We maintain our forecast of two more interest rate hikes in the first half, with the first one in March. We are also looking for a reserve requirement hike soon to signal the authorities' continued efforts to control liquidity.
Liu Ligang
Economist at ANZ
As the inflationary pressures have yet to abate, we expect the central bank will continue monetary policy normalization in the short term. We expect one more hike in the reserve requirement soon, with the earliest possibility being this weekend. Going forward, China will rely more on interest and exchange rate policies to manage inflation. We expect two more interest rate hikes before the second quarter of 2011.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
