China industrial output up 16% in May

(Agencies)
Updated: 2008-06-17 09:31

BEIJING -- China's industrial output showed signs of slowing down in May, suggesting the Asian giant is hurting from weakening demand from abroad, the government and experts said Monday.

Factory production in the world's fourth largest economy increased 16.0 percent last month from a year earlier, the National Bureau of Statistics said in a statement.

The figure was rather modest by Chinese standards, even though May had three more working days in 2008 than in 2007 following a reform of the holiday schedule, analysts said.

Chinese shoppers buy food at a supermarket in Beijing. China's industrial output showed signs of slowing down in May, suggesting the Asian giant is hurting from weakening demand from abroad, the government and experts have said. [Agencies]

"This shows industrial production was relatively weak," Xing Zhiqiang, an economist with China International Capital Corporation, told AFP.

Industrial output had risen by 15.7 percent in April, but in May last year -- a more relevant comparison -- it had gone up by a significantly more robust 18.1 percent.

Xing said output was mainly affected by a slowing global economy, with the increase in the value of exports delivered by Chinese industrial producers easing to 18.2 percent in May from 19.9 percent in the same month last year.

In the first five months of 2008, China's trade surplus declined by 8.6 percent from the same period a year ago to 78 billion dollars, previously published statistics showed.

The Chinese government said earlier this month the trade surplus was likely to shrink in 2008 for the first time in five years on weakening exports mainly due to the rising local currency and the US economic slowdown.

But analysts said the appreciation of the Chinese yuan would continue this year at the current pace as it made imports cheaper and could thus help solve the country's growing problem with inflation.

"The export slowdown was caused by weaker external demand, rises raw material prices and rising labour costs in China. It's hard to say it was simply led by the rise in the yuan," Xing said.

The National Bureau of Statistics said China's crude oil output in May this year reached 16.2 million tonnes, a modest rise of 1.8 percent from a year earlier.

China is under pressure to boost its own crude production amid soaring international prices of oil, but the nation is facing rapidly depleting domestic reserves.

Chinese factories also saw a modest 7.5 percent increase in the production of cement last month, to 130 million tonnes, the bureau said.

The increase in cement output -- slow for China -- could reflect government policies to rein in investment in fixed assets in order to save the economy from too-rapid inflation.

China's vehicle output reached 895,000 units in May, a rise of 21.7 percent from a year earlier, according to the statistics bureau.

Of this number, 457,000 were sedans, a rise of 17.6 percent from the same month last year, the bureau said.

China's industrial output expanded by 16.3 percent during the first five months of the year, the bureau said.