Growth stalls at state firms

PUBLISHED : Saturday, 18 May, 1996, 12:00am
UPDATED : Saturday, 18 May, 1996, 12:00am

Growth at China's state-owned industrial enterprises remains sluggish, with year-on-year output up only 4.6 per cent in April, according top State Statistical Bureau figures.

A Beijing economist said that against the 7.4 per cent April inflation rate, growth was actually negative.

The poor performances had been anticipated and hopefully would improve following the People's Bank of China decision to cut overall lending rates by 0.75 percentage points, he said.

Overall industrial output growth in April was 13.7 per cent in real terms, up from 12.2 per cent in March, but this was led by non-state-owned industrial sector, Xinhua (the New China News Agency) quoted the bureau's report as saying.

Light industry maintained a fast growth rate. At 14.6 per cent it was up 1.1 percentage point from the first quarter while heavy industry dropped 0.7 percentage points to 13 per cent.

In April, factories sold 94 per cent of the goods they made, 1.12 percentage points lower than for the same month a year ago. The production-to-sales ratio for the first four months of the year was 93.27 per cent, 1.67 percentage points lower than a year ago, Bloomberg quoted the Shanghai Securities News as saying.

To meet capital shortfalls at state-owned enterprises (SOEs), Chinese financial institutions increased new lendings by 26 per cent in April.

New bank loans were 91.6 billion yuan (about HK$85 billion) in April, 18.9 billion yuan more than the previous corresponding month.

The statistical bureau report said 72.7 per cent of the new loans were short term, aiming to help SOEs meet working capital needs.

Chinese investors shrugged off the removal of a government subsidy for deposits, lifting new deposits by 70.7 per cent in April from the same month a year ago. Deposits for the month totalled 131.8 billion yuan, an increase of 54.6 billion from April 1995.

At the start of April, the PBOC removed a subsidy rate previously offered to holders of long term fixed-term deposits. Holders of such deposits before April 1 remain eligible for the inflation-proofing subsidy, which will be worth 7.23 percentage points for deposits maturing in June.

The total value of fixed asset investment in April was 79.4 billion yuan, 16.5 per cent higher than same month of last year. Investment in capital construction rose 11.4 per cent while investment in technical upgrading and renovation dropped by 0.6 per cent.