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Industrial Output Grows by 16%

China's industrial output grew 23.2 percent in February, compared with a year ago, to 370.9 billion yuan (US$44.7 billion), the National Bureau of Statistics said Wednesday.

For the first two months, the industrial output rose a year-on-year 16.6 percent to 705.97 billion yuan (US$85.1 billion).

Bureau spokesman Yao Jingyuan said electronics and telecommunication equipment, as well as metals, are the major factors which fueled fast growth in industrial output in the last two months.

The two sectors combined contributed 4.3 percentage points to industrial growth as a whole, Yao said.

During the first two months of the year, exports handled by industrial companies stood at 429.2 billion yuan (US$51.7 billion), a year-on-year increase of 26.3 percent, the bureau said.

Industrial output is an important contributor to China's gross domestic product.

Last year, China's industrial output grew 17 percent, and the country's gross domestic product grew 9.1 percent.

This sharp increase since last year worries Chinese policy-makers who thought sectors such as steel and cement were drawing too much investment.

This, they believe, could lead to overcapacity, hit corporate profits and trigger deflation.

But Niu Li, a senior economist with the State Information Center, said the country's production lines would unlikely cool down in the coming months, as China's economy has entered a new development period.

"Pillar industries such as housing and cars will continue to develop at a rapid speed as more affluent people begin to consume these products," he said.

Investment is also unlikely to drop because private investment has become more active, he said.

As the world economy turns for the better, external demand will be strong, he said.

Driven by the nation's fast industrial growth, the country's economy is likely to increase 8.5 percent this year.

Wang Zhao, a researcher with the State Council's Development Research Center, agreed that production will continue to grow at a higher rate in the coming months.

Qiu Xiaohua, Deputy Commissioner of the National Bureau of Statistics, said he was confident the Chinese economy would grow at a higher rate in the coming decade.

Along with the deepening of reforms, market vitality would become stronger, he said.

The micro base for current economic development has also been improving as entrepreneurs and consumers have shown increased confidence in the future, he said.

New growth areas in the economy resulted from the structural adjustment, which continued to expand, Qiu said.

The formation of the Pearl River Delta, Yangtze River Delta and Bohai economic zone, the reviving of the old industrial base in Northeast China, and the further development of the high-tech industry and service sector will all inject new vigor into future economic development, he said.

(China Daily March 11, 2004)

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