Statistics show end to revival in output
MARK O'NEILL in Beijing and Wang Xiangwei
Industrial output slowed again in November after a brief spurt in October, reflecting a slump in production of energy, and of collectively owned industries and foreign firms.
Meanwhile, a leading economist urged the authorities to make the property sector the main growth engine next year, forecasting the economy would expand between 8 and 10 per cent next year from 9 per cent this year.
The State Statistical Bureau said industrial output last month rose 11.6 per cent to 188.4 billion yuan (about HK$175.39 billion), but was year-on-year growth was down from 11.8 per cent in October.
The October recovery appears to have been a blip, as industrial output seems to have resumed the downward trend seen since the start of the year. Economists said the decline reflected weak demand, build-up in inventories and over-capacity in the economy.
Figures showed that the collectively owned enterprises, foreign firms and private firms had been particularly hit.
Output of collectively owned firms last month rose 12.7 per cent, down from 13.1 per cent in October, while output of other industries, mainly in the private sector, rose by 12.6 per cent, down from 15.1 per cent in October.
For state-owned or controlled companies, output rebounded by 7.7 per cent to 105.6 billion yuan.
Energy production continued to slump, down 0.3 per cent year on year to 110 million tonnes last month.
Statistical bureau economist Qiu Xiaohua said China should impose fines to force developers to sell empty apartments and help make the property sector the main engine of growth of the economy next year.
He forecast retail price inflation would rise slightly from 1 per cent this year, in an interview published in the China Business Times .
Mr Qiu said that, as consumer spending would remain stagnant, the most likely engine of growth was housing for ordinary people.
The problem was that thousands of commercial apartments, lying empty across mainland cities, were as expensive as those in advanced countries and far above the capacity of most people to buy.
Mr Qiu said the government must take steps to reduce these apartments' prices by cutting administrative fees, making mortgages more accessible and fining developers who leave apartments empty for more than a certain period.
Growth in fixed-asset investment, a big engine of growth in the early 1990s, would reach only 12 per cent this year, its lowest level in recent years, Mr Qiu said.
The 1 per cent rise in inflation this year, down from 6.1 per cent last year, is due to a bumper grain harvest and fierce competition.
The biggest problem in the economy is unemployment, which will reach 4 per cent by the end of the year.
An additional 10 million workers were laid off by the end of September, when 46.7 per cent of state firms were in the red and nearly 600 billion yuan worth of goods remained unsold.