Industrial growth slows as exports, retail soar

GROWTH in China's industrial production cooled off slightly in July as exports soared and retail sales climbed, according to statistics released yesterday.

Production was still at a strong level, and robust domestic and overseas demand signaled that the economy may not slow down in the second half, analysts said.

Output rose 18 percent last month year on year after gaining 19.4 percent in June, the National Bureau of Statistics said yesterday. The monthly increase was the third-largest so far this year.

The growth over the past seven months totaled an 18.5-percent rise from a year earlier.

"July's milder growth was merely a temporary slow down as extreme weather conditions in some parts of China dampened production," said Feng Yuming, an analyst at Orient Securities Co.

"We expect output to pick up amid robust demand both home and abroad - along with other robust economic indicators - to keep the economy in the fast lane."

Output data came on the heels of other stronger economic barometers released this week. Retail sales climbed 16.4 percent from a year earlier, speeding up from June's 16-percent rise. Exports jumped 34.2 percent in July, sending the monthly trade surplus to US$24.35 billion. Inflation jumped in July to 5.6 percent, the highest rate in more than a decade.

Government reports said problems in the current economy include rapid expansion in industrial output, a wide trade surplus gap, fast investment growth, excessive liquidity, rising inflationary pressure and energy conservation challenges.

Gross domestic product expanded 11.9 percent in the second quarter from a year earlier, the fastest in more than a decade even after three interest-rate rises so far this year along with administrative measures such as stricter land controls and a reduction in export incentives.

In yesterday's report, fast-growing industries included the vehicle sector, which climbed 32.7 percent from last July. Output of transport equipment production charted growth of 26.6 percent year on year and that of non-metallic mineral products advanced 22.7 percent last month.

Figures for urban fixed-asset investment, the final key economic indicator for July, will be released today. Urban investment climbed at a rate of 28.5 percent in June.