Industrial output up but growth still slow
Mainland industrial output in August rebounded from July, but the growth rate remained slow, suggesting the twin problems of falling demand and rising inventories are still besetting Chinese manufacturers.
August's output rose 10.9 per cent from the previous month and growth year-on-year for August was 8.4 per cent, the State Statistical Bureau said yesterday.
Economists said the recovery was expected because July production slowed due to hot weather and the nationwide celebration of Hong Kong's return to mainland sovereignty on July 1.
They said they expected output to continue to pick up in the next few months - usually the busiest period because industrial manufacturers would speed up production to meet their annual targets.
Despite that, they said full-year 1997 growth in industrial output would be lower than growth in each of the past few years because manufacturers were dogged by deflationary pressures in the economy.
Many firms had to cut production to clear up inventories.
Industrial output grew 11.6 per cent in the first six months this year, compared with 13 per cent in the first half for the past two years. In the first seven months, industrial manufacturers on the mainland reported combined pre-tax profits of 73.7 billion yuan (about HK$68.48 billion), up 33 per cent over the same period last year.
Of the total, state-owned enterprises reported combined pre-tax profits of 14.73 billion yuan, an increase of 92.8 per cent from the same period last year.
However, the bureau said losses by state enterprises were still huge. It did not provide figures.
In August, output by state-owned enterprises and those in which the state has a controlling stake rose 8.4 per cent.
The state-owned enterprises alone managed only to achieve 5.9 per cent growth.
Output from collectively-owned enterprises - which were once the major economic growth engine - fell below the national growth average, rising only 8.4 per cent.
Output of other industries, mainly foreign-funded enterprises and private firms, continued to maintain brisk growth, rising 16.7 per cent, the bureau said.
The ratio of sales to production in August was 96.7 per cent, up 0.2 percentage points, the highest monthly level so far this year.
Output of primary energy products increased by 3.2 per cent, the bureau said.