Industrial growth to fall in second half

08:45, July 21, 2010      

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China's industrial growth is expected to decline in the second half of the year, but there won't be a double-dip, Zhu Hongren, a spokesman for the Ministry of Industry and Information Technology, said Tuesday at a press conference in Beijing.

The country's industrial growth has seen a slow down over the past six months, owing to a high baseline and the impact of the government's fine-tuning, Zhu said.

Industrial growth fell to 13.7 percent in June, compared to 20.7 percent during January and February, according to the National Bureau of Statistics.

A high base last year will impact the industrial growth in the second half, Zhu said.

Inventory accumulation may be slowing as enterprises have concerns over investment and exports growth in the second half, which would lead to a moderation in industrial growth, Chang Jian, a Hong Kong-based economist with Barclays Capital, told the Global Times.

The central government will further enhance efforts to put restraints on energy-intensive industries over the rest of the year, holding back industrial growth, Chang said.

A rapid growth seen in some high energy-consuming industries has slowed following the State Council's call for emission reductions and energy saving in early May.

The government will maintain policy continuity and stability in the second half while being more focused and flexible in macro control of the economy because the recovery remains uncertain, Zhu said.

The outlook for export growth over the rest of the year remains complicated, given an expected slow in overseas demand, rising cost pressures on exporters, and trade frictions, Yao Jian, spokesperson for the Ministry of Commerce, said Tuesday.

The economy is estimated to grow at a slower pace in the third and fourth quarter, as China pays more attention to an industrial restructuring and a shift of economic growth model, Chang said.

The government is trying to move away from export dependence to a healthier reliance on domestic consumer spending.

The moderation should be regarded as the economy's returning to a normal growth from signs of overheating seen early this year, said Cheng Manjiang, an economist with the Bank of China International in Beijing.

The slow is moderate and the economy is still expected to grow around 10 percent for the whole year, Chang echoed Zhu's remarks that a double-dip is not likely. "The slowing growth will ensure the economy's more sustainable development."

Source: Global Times


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