China’s industrial output rose by 8.3 percent last month in a sign that a huge stimulus package is kicking in, Premier Wen Jiabao (溫家寶) said in an interview published yesterday.
Last month’s growth accelerated from the 3.8 percent rise in the first two months as domestic demand continued to improve, Wen said, according to the China Securities Journal.
Data on fixed asset investment and retail sales, which measure spending on infrastructure and consumption respectively, also increased quickly in the first quarter, he said in an interview conducted in Thailand at the weekend.
All this showed the economy was performing “better than expected” thanks to Beijing’s measures to tackle the international financial crisis, he said.
China in November unveiled an unprecedented 4 trillion yuan (US$580 billion) stimulus package to ward off the worst effects of the global crisis.
However, Wen warned that the nation’s export-dependent economy was still facing major difficulties because of a sharp contraction in foreign demand, which has placed increasing pressure on employment.
“The international financial crisis has not yet hit the bottom. It’s hard to say that China alone has steered away from the crisis,” he said.
Meanwhile, China’s property prices fell by a record last month and new construction tumbled in the first quarter, dragging down growth.
Real-estate prices in 70 major cities fell 1.3 percent last month from a year earlier, the most since records began in 2005, the National Bureau of Statistics said in a statement on its Web site yesterday. New construction by floor area fell 16.2 percent in the first quarter, it said.
The figures also contained signs that the real estate industry may revive as lending surges and the government implements the stimulus package.
Spending on real estate development grew 4.1 percent in the first quarter, the statistics bureau said.
“Property sales are in an early recovery in major Chinese cities as prices drop to an acceptable range for some buyers,” said Xing Ziqiang (邢自強), an economist at China International Capital Corp (中國國際金融公司) in Beijing. “However, property prices may need to drop another 5 to 10 percent to ensure a sustainable recovery in both sales and property investment.”