China output weakening

Posted on 14 Mar 2008 by The Manufacturer

Data has shown that China’s industrial output growth reduced noticeably during January and February.

The nation’s factory production grew by 15.4 per cent during the two months, compared to the 18.5 per cent recorded for the same period in 2007.

Export figures also fell significantly, with growth of 16.8 per cent in the eight weeks to the end of February, compared to 41.5 per cent during the same period last year.

The industrial sector in China has been hit with such problems as increased input costs, a stronger yuan, higher interest rates, bad weather, and a lessening demand from the US.

So fast is the country’s economy expanding, the Chinese government is taking measures to slow production output in a bid to prevent meltdown.

“With heightened inflation risks, we expect that further tightening measures by the government coupled with a gradual softening in exports will likely lead to downward pressure on industrial production,” said Goldman Sachs.