Slowing industrial production provides room for restructuring

The growth of China's industrial value-added output eased to 11.4 percent year-on-year in the first two months of this year as market demand shrank, the National Bureau of Statistics (NBS) said Friday. The figure dropped from 12.8 percent in December last year, the NBS said in an online statement. The easing growth of industrial production will provide room for Chinese manufacturers to push forward restructuring and accomplish emission-reduction goals, analysts said. NBS data shows that China's industrial value-added output has been slowing since last year, recording 14.4 percent in the first quarter of 2011, 14 percent in the second quarter, 13.8 percent in the third quarter, and 12.8 percent in the fourth quarter. The downward trend may continue in the first quarter of the year, as domestic growth will slow in the short term caused by a dismal external market and slowing domestic manufacturing activities, market insiders said. However, the growth of industrial production will see moderate rebounds starting in the second quarter of the year, said Lu Zhengwei, chief economist of the Industrial Bank, citing strong fundamentals of the economy's industrial production. The government targets a 11-percent growth in the industrial value-added output this year, Miao Wei, minister of Industry and Information Technology, said at the ongoing annual sessions of the National People's Congress, China's top legislature, and the Chinese People's Political Consultative Conference, the country's top political advisory body. Miao said the government has set a lower growth rate as it aims to save more resources for promoting industrial upgrading and growth mode transformation, and help achieve emission-reduction goals. The government aims to cut its economy's energy consumption per unit of industrial value-added output by 5 percent this year, and that for carbon dioxide emission by over 5 percent, according to Miao. The NBS said the industrial value-added output of state-owned and state-held companies rose 7.3 percent year-on-year over Jan. - Feb. period, while that of collectively-owned and joint-stock enterprises expanded by 9.9 percent and 13.9 percent, respectively. Industrial value-added output for the heavy industry sector rose 10.9 percent from a year earlier during the period, while that of the light industry sector climbed 12.7 percent. All 41 of the country's industrial sectors posted gains in the first two months, with textiles up 14.1 percent; chemical materials and products up 13.4 percent; and general equipment manufacturing up 8.6 percent. The industrial value-added output increased by 7.8 percent in China's eastern regions during the period, by 17.6 percent in central areas and by 16.6 percent in western parts of the country. Moreover, 317 out of 471 products saw value-added outputs increase over the Jan. - Feb. period. The output of electricity rose 7.1 percent year-on-year to 718.7 billion kilowatt-hours, while that of steel increased 4.6 percent to 139.29 million tonnes. Meanwhile, the output of automobiles dropped 1.8 percent year on year in the first two months to 3.12 million units. Industrial value-added output measures the final output value of industrial production, or the value of gross industrial output minus intermediate input, such as raw materials and labor costs. China's industrial value-added output growth decelerated to 13.9 percent in 2011 from 15.7 percent in 2010, NBS data showed.