BEIJING yesterday claimed early success in the battle to cool its overheating economy. New figures showed a fall in the growth of industrial output, but the Government warned there was no sign of price rises easing. Factories across the country turned out 286.3 billion yuan (about HK$383.6 billion) worth of goods last month - up 25.1 per cent over the same period last year, but down 5.1 percentage points on June. Officials told Xinhua (the New China News Agency) that the slow-down was ''a sign that macro-control of the overheated economy is having initial success''. The figures are likely to be used to justify Vice-Premier Zhu Rongji's emergency measures - involving a credit squeeze, interest rate rises and the early end of loans fuelling property and stock market speculation. Analysts, however, still see inflation as China's number one economic enemy and Hong Kong-based economist Dr Thomas Chan Man-hung warned that the worst was far from over, and that inflationary pressure would remain in the second half of this year. ''It is too early to say if the macro-control measures are successful since there will have to be a time lapse for these measures to exercise their impact on the economy,'' he said. Dr Chan, head of Hong Kong Polytechnic's China Business Centre, warned that inflationary pressure would remain in the second half of the year. Optimism so early was dangerous since it might encourage officials to relax their efforts. The State Statistics Bureau acknowledged that the positive effect of Mr Zhu's package on the economy was only starting and investment in fixed assets was still too large. ''There was no halt in price rises,'' it said. ''The price index of retail sales was up 10.8 per cent from January to July over the same period last year, while workers' living costs were up 14 per cent.'' Nevertheless, the bureau claimed that positive changes had occurred in other sectors of the economy and cited the lower number of investment projects in fixed assets as an example. In July, the number of new capital construction and renovation projects fell by 6,372, with the proportion of investment in new projects down to 31.6 per cent in July, compared with 36.6 per cent for June. Investment in commercial building, at 9.1 billion yuan, was also down. A stable consumer commodity market was also reported. July saw retail sales increase by 26.5 per cent over the same period last year to reach 108.76 billion yuan. The shortage of capital goods also eased following the crackdown on the real estate market and unauthorised development zones, while the cost of raw materials and construction materials were also lower than previous months. Spured by the rise in interest rates, bank deposits grew strongly. New deposits by city and rural residents stood at 40.5 billion yuan last month, up 26.9 billion yuan when compared with the same period last year. Exports recovered last month by 6.5 per cent over the same period last year to US$7.627 billion (HK$59.1 billion). July's imports totalled US$8.762 billion, up 39.6 per cent.