China's industrial production growth rate dropped by 2.8 percentage points last month, the National Bureau of Statistics said yesterday, signalling that government efforts to curb overly fast economic growth are working. That raises the prospect the government may ease its control measures soon.
Value-added industrial output rose 16.7 per cent year on year to 720 billion yuan last month, a sharp drop from the 19.5 per cent year-on- year gain for June, the bureau announced on its website.
July's growth was the slowest since April's 16.6 per cent year-on-year growth.
During the first seven months of 2006, industrial output grew 17.6 per cent year on year to 4.696 trillion yuan, the bureau said.
'The slowdown suggests that the government's macroeconomic controls are taking effect and the possible easing of the tightening measures,' said Huang Yiping, Citigroup's chief Asia economist.
Mr Huang said the weaker industrial output growth last month should provide at least temporary relief to policymakers and allow them more time to observe the effect of earlier tightening measures. The latest figures on exports, foreign direct investment, retail sales and consumption have all pointed to an easing of economic growth.
