Business

Weighed down by debt control, China's industrial output slows sharply

BEIJING:  China's industrial output, a key engine of growth, slowed sharply last month as government efforts to rein in debt weighed on demand and economic activity, official data showed yesterday.

The figures come as the authorities have sought to tighten regulations to tame debt and reduce excess capacity left over from massive government-backed infrastructure spending at the height of the global financial crisis.

Output by Chinese factories and workshops grew by a lower-than-expected 6.4 per cent compared to the same month last year, the National Bureau of Statistics said.

Retail sales, meanwhile, slowed slightly to 10.4 per cent last month, compared to 11 per cent in June, while fixed asset investment posted 8.3 per cent growth in the January-July period - both slightly below expectations.

"In general, the national economy was generally steady in July with continued positive momentum and deepening structural reform," said national statistics bureau spokesman Mao Shengyong.

"But we also see that the international circumstance is still complicated and fluid, domestic structural conflicts still stand out, and there are still a lot of hidden concerns."

Economic growth could slow by up to 0.2 percentage points in the second half of the year, Mr Mao said.

While China has posted better-than-expected second quarter growth of 6.9 per cent, economic analysts have warned that the momentum will not last as the authorities clamp down on debt.

Property development investment eased between January and July, signalling that the government's tightening policies "have finally trickled down through the economy", according to ANZ Research. - AFP

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