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GDP growth within reasonable range: NBS

2014-09-15 08:50 Global Times Web Editor: Qin Dexing

August data shows cooling of key sectors

China's economy is still growing within a reasonable range despite slowdown in a batch of economic indicators in August, the statistics bureau said over the weekend.

Industrial value-added output grew by 6.9 percent in August from a year earlier, down from 9 percent in July and the lowest reading since December 2012, according to data released by the National Bureau of Statistics (NBS) on Saturday.

Power output, another bellwether for economic activity, fell by 2.2 percent year-on-year in August, marking the first annual decline in more than four years, according to the NBS.

Urban fixed-assets investment rose by 16.5 percent year-on-year in the first eight months of this year, 0.5 percentage points lower than the first seven months, the NBS said.

Guo Tongxin, a statistician with the NBS, attributed the slowdown of these indicators to dampened external demand, high base effect, relatively low temperatures and slowing property market, read a statement posted Saturday on the bureau's website.

"Even taking the high base of last year into consideration, the slump in industrial production growth far exceeds our expectation," Xu Gao, chief economist of China Everbright Securities Co, told the Global Times Sunday.

As the drop in external demand and consumption growth is moderate, cooling investment is the major reason behind the economic slowdown, he said.

China's property investment growth moderated to 13.2 percent in the first eight months of this year, and new construction area and housing sales also fell, according to the NBS.

"The property market is related to 50-60 industries, so its slowdown has weighed on the manufacturing sector and investment," Lian Ping, chief economist with the Bank of Communications, told the Global Times Sunday.

Guo said in the statement that "it is normal to see fluctuations in some indicators," and stressed that there are favorable conditions for China to stabilize economic growth, including steady employment and consumer price index data, progress in industrial restructuring, stable consumption growth, as well as a booming services industry.

"China's economy is confronted with great downward pressure, but it still growing at a reasonable pace, and the country could achieve its annual economic goals," the statement said.

Lian expects economic data for the third quarter to be worse than the second quarter, predicting the GDP growth to slow to 7.3-7.4 percent in the third quarter from 7.5 percent in the previous quarter.

But the NBS statement indicates that a cut in interest rates or the reserve requirement ratio is unlikely in the near term, he noted.

China's broad money supply, also known as M2, grew 12.8 percent in August from a year earlier, data from the central bank showed Tuesday, which is down from 13.5 percent in July and below the government's target of 13 percent for the whole year.

Premier Li Keqiang told the Summer Davos Forum held in Tianjin last week that the government will not be distracted by short-term fluctuations of individual indicators, and China cannot rely on loose credit to stimulate the economy.

"The central government has showed greater tolerance for fluctuations in the economic growth," said Xu from Everbright Securities.

But with the economic growth further sliding close to the government's bottom line, Xu believes that the central authorities are likely to adopt easier policy stance, especially on monetary policy, within the year.

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