China's industrial output grew by 16.5 per cent in July compared with the same month of last year, the National Bureau of Statistics reported Monday.

The industrial output stood at 341 billion yuan (US$41.1 billion) for the month, the bureau said.

The industrial output rose year-on-year by 16.9 per cent in June and 13.7 per cent in May.

For the first seven months, the industrial output rose 16.4 per cent year-on-year to 2.18 trillion yuan (US$262.6 billion), according to the bureau.

Bureau spokesman Yao Jingyuan said the output of major industrial sectors including telecommunications, electronics and transportation equipment as well as computers continued to rise at an accelerated rate in July.

Mobile phone production rose 64.8 per cent in the month, while computer output was up 76.6 per cent, he said.

Output of all kinds of vehicles was 341,000 units, up 42.1 per cent from a year earlier, while passenger car production was up 70.6 per cent to 171,000 vehicles, Yao said.

Steel output was 19.8 million tons in July, a year-on-year increase of 25.1 per cent.

China's industrial companies generated 169.9 billion kilowatt hours of electricity in the month, an increase of 15.2 per cent.

In July, exports handled by the industrial sector were worth 218.8 billion yuan (US$26.4 billion), a year-on-year increase of 28.3 per cent.

Wang Zhao, a researcher with the Development Research Centre under the State Council, said the rapid growth in industrial production suggests the impact of SARS (severe acute respiratory syndrome) was temporary.

"Production will continue to grow at a higher rate in the coming months,'' he said.

The SARS epidemic did not bring a large negative impact on the industrial sector, which contributed more than 50 per cent to the gross domestic product, Wang said.

The outbreak's negative impact on investment is minimal, although it has had some effect on some sectors, especially the tourism and catering industry, he said.

The robust fixed asset investment expected this year will benefit heavy industries such as cement and steel, he said.

"The impact of SARS on the whole economy should be less than 1 percentage point,'' he said.

Yao said China is capable of meeting an economic growth target of 7 per cent this year. During the first half of 2003, the economy grew 8.2 per cent.

Economists at the Chinese Academy of Social Sciences said the nation's economy could even grow by 8 per cent this year.

The influence of SARS on China's social and economic development has been more minor than the impact of the Asian financial crisis in 1997, one economist said.

And it will be easier to overcome than the Asian meltdown or the September 11 terrorist attacks in the United States in 2001, the economist said.

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