Export surge fuels 8.9pc output growth

PUBLISHED : Tuesday, 22 February, 2000, 12:00am
UPDATED : Tuesday, 22 February, 2000, 12:00am

Mainland industrial output last month grew at a stronger than expected pace.

The increase was fuelled by Beijing's aggressive monetary policy, a strong export performance and improved sentiment, amid signs of easing deflationary pressure.

Value-added industrial output last month rose 8.9 per cent from a year earlier to 164.3 billion yuan (about HK$152.79 billion).

This was up from 7.4 per cent growth in December, according to State Statistical Bureau figures yesterday.

Economists expect future growth in industrial output will be decided by the sustained recovery in exports and consumption.

HSBC China Services research manager Benny Chiu Ling-bun said yesterday: 'Overall sentiment is more positive now.

'Exports are strong and domestic demand is brisk. Inventories are also falling.' Mr Chiu said it would be too early to predict whether the trend would continue for the remainder of the year.

Exports last month rose 47.8 per cent year on year to US$16.8 billion due to higher international demand and an increase in tax rebates for exporters.

Also yesterday, the central bank announced that money-supply growth in the mainland improved last month, as banks lent more and consumers were more willing to spend amid a more favourable market sentiment.

The broad money supply M2, a measure that includes cash in circulation, business deposits and personal savings, swelled by 14.9 per cent year on year to 12.12 trillion yuan by the end of last month, according to the People's Bank of China figures.

M2 rose 14.7 per cent at the end of last year.

The narrower M1, which includes cash in circulation and business deposits, grew 19.4 per cent to 4.65 trillion yuan last month, up from the 17.7 per cent at the end of last year.

M0, or cash in circulation, jumped 34 per cent to 1.6 trillion yuan last month, against a 20.1 per cent increase at the end of December.

The mainland recorded economic growth of 7.1 per cent last year, down from 7.8 per cent in 1998.

Meanwhile, growth in outstanding loans at all financial institutions rose 12.8 per cent to 9.38 trillion yuan at the end of last month, according to Xinhua.

Personal savings grew 12.3 per cent to 10.77 trillion yuan at the end of last month.

The monthly increase of 88.6 billion yuan is one of the biggest gain since April.