China’s Industrial Production Rises To 9.2% In September

   on October 18 2012 12:10 AM
Chinese Yuan
China's yuan. Reuters

According to the official data released Thursday, China’s industrial production rose in September compared to that in the previous month, indicating an upswing in the manufacturing output.

The data released by the National Bureau of Statistics of China showed that the country’s industrial production rose to 9.2 percent in September, up from 8.9 percent in August and also more than the analysts’ expectation of 9 percent.

The National Bureau of Statistics of China reported Thursday that the country’s gross domestic product growth slowed down to 7.4 percent in the third quarter, down from 7.6 percent in the second quarter, due to the soft global demand and reduced real estate investment in the world's second largest economy.

The government has already lowered its economic growth target in 2012 to 7.5 percent. In 2011 and 2010, the economy grew at the rate of 9.2 percent and 10.4 percent respectively.

These reports come after earlier in the week it was reported that the rate of inflation in China slowed down in September from the previous month, showing signs of a gradual decline in price pressure to make room for monetary easing.

The data from the National Bureau of Statistics released Monday show that the consumer price index of China rose 1.9 percent in September from a year earlier, down from 2 percent in August. The diminishing inflation should be good news because it can help the government invigorate growth without much concern about the rising prices.

The continuing debt crisis in Europe and the tentative U.S. recovery have hurt the demand for exports, the key driver of China's economy. The International Monetary Fund has warned that the escalation of the euro zone debt problems could slash China's GDP growth for 2012 in half.

Earlier in the year, the World Bank reported that China's export-and-investment-driven economic model, though successful for decades, was no longer sustainable and reforms were needed to prevent a sudden slump in growth.

The World Bank said that the country's economic growth would slow down to 5 to 6 percent annually by 2030 and a major overhaul would be needed to sustain even that level.

Earlier this month, it was reported that China's manufacturing activity in September continued to remain in the phase of contraction. The data released by the China Federation of Logistics & Purchasing showed that the manufacturing PMI rose to 49.8 in September, up from 49.2 in August. The continued shrinking of the manufacturing activity would increase fears of the likelihood of a sharp retardation in the economy.

Investors expect that instead of fighting inflation, the most urgent priority for China appears to be the pro-growth policy stance against the current uncertain global situation.

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