Growth in China's industrial output slowed in the year through July for the fifth month in a row, but the central bank said it would keep a tight grip on credit to help steer the economy to a soft landing.
Production had increased by 15.5 percent in the period, compared with 16.2 percent in the year to June, the State Statistical Bureau said yesterday. That was close to forecasts of a 15.9 percent rise and well below peak growth of 23.2 percent in the 12 months to February.
Economists expect the moderating trend to persist, slowing industrial growth to around 15 percent as credit curbs and government orders to halt investment in overheated sectors continued to ripple through the world's seventh-largest economy.
"At the moment, all the signs point towards a nice, moderate slowdown, which will be good for the region," said Tai Hui, an economist with Standard Chartered Bank in Hong Kong.
Some economists and officials have called on the authorities to start relaxing the raft of restrictions, saying they were driving smaller private firms in particular out of business.
But the central bank said it was too soon to declare victory.
"The current macrocontrol measures are in a critical phase and have achieved initial results, but the foundation is still not solid," the People's Bank of China said.
Its task was to do a good job of implementing those monetary policies already in place and ensuring reasonable control of credit growth, the bank said in its quarterly monetary report.
Tightening measures such as requiring banks to hold more cash in reserve instead of lending it out have succeeded in bringing the pace of money supply growth below the central bank's target.
The bank said it expected the economy, which grew by a slower-than-expected 9.6 percent in the year through the second quarter, would ease further in the third quarter. It forecast inflation, now at a seven-year high, would moderate by the end of the year.
Skeptics periodically express doubts about the quality of China's data. But slowing money-growth figures from the central bank, deemed to be the most accurate data set, tell the same story of a cooling economy as the GDP and output figures.
"GDP and industrial production do seem to follow relatively closely in terms of the trend, so in that regard we do think it is a relatively reliable data series," Grace Ng (吳向紅) of JP Morgan in Hong Kong said of the report.
Smoothing out seasonal variations, JP Morgan estimates that output rose 0.8 percent last month compared with June. The bank calculates production rose 1.0 percent in June and fell 0.4 percent in May, when the government cracked down hard on credit.
Despite the overall slowdown, mixed data from sectors where frenzied investment has worried policymakers help explain the bank's cautious stance.
Growth in output of aluminum slowed to 10.8 percent in the 12 months to July from 36.8 percent a month earlier.
Cement production growth declined to 11 percent from 13.2 percent, and automobiles to 5.4 percent from 20.4 percent.
But growth in output of steel quickened to 18.5 percent from 17.3 percent, though it remained well below a peak of 37.7 percent in the year to February.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS