Feb. 12 (Bloomberg) -- China's industrial production grew last month at a record pace, surging as companies such as Bayerische Motoren Werke Ag and BOE Technology Group Co. expand to meet rising demand in the world's sixth-largest economy.
Production rose 19 percent from a year earlier after an 18 percent gain in December, the statistics bureau said on its Web site in Beijing. The figures were adjusted for the first time to allow for the Lunar New Year holiday falling in different months.
``BMW's production in China has just started in the course of 2003,'' said Helmut Panke, the German carmaker's chairman. ``We will continue to ramp that up and grow.''
Booming production is helping China's economy grow more than twice as fast as any of the Group of Seven nations' economies. It's also led to power shortages and prompted the government to restrict investment in some industries to head off possible gluts of homes and cars.
``Growth will probably ease in the first half as the government's tightening policy gradually takes effect,'' said Song Guoxiang, an economist with China Galaxy Securities Co in Beijing.
The central bank last year raised banks' reserve requirements, tightened rules governing lending to property developers and stopped approving new aluminum smelters. The bank yesterday said it aims to cut new loans by 13 percent this year.
Investment
China's banking regulator said Sunday that it will check the four biggest banks' lending to steel mills, property developers and automakers to assess bad-loan levels and risk control systems. Lending to steel makers and cement producers will be reined in the official Xinhua news service reported yesterday, citing Premier Wen Jiabao.
Fixed-asset investment, which includes spending on factories, roads and railways, will probably rise 22 percent this quarter after climbing 27 percent last year, the commerce ministry said last week, citing a study by the National Development Reform Commission. Economic growth will likely slow to 8.5 percent this quarter from 9.9 percent in the fourth quarter, it said.
Even as investment may slow, consumer spending is picking up. Disposable incomes in China's towns and cities last year topped $1,000 per person for the first time and the nation's retail sales in December grew 11 percent, their fastest pace in 2 1/2 years.
Cars, Televisions
BMW said its China sales tripled last year to 18,679 units. The company's factory, a venture with Brilliance China Automotive Holdings Ltd., in the northeastern Chinese city of Shenyang can make as many as 30,000 3-Series and 5-Series cars a year.
BOE Technology Group Co., a Chinese maker of televisions and computers, plans to borrow $700 million next month to build a liquid crystal display plant in Beijing. The company plans to become the world's fifth-largest LCD maker by 2008, in time for the Olympic Games in Beijing, from its current ranking of ninth.
The commerce ministry said last week it expects consumer spending to grow 11 percent this quarter and exports to expand at about twice that pace.
In the U.S., the No. 1 buyer of Chinese exports, retail sales, excluding autos, rose in December for an eighth straight month and consumer confidence in January reached a three-year high. The U.S. economy may expand as much as 5 percent this year, which would be its fastest since 1984, Federal Reserve Chairman Alan Greenspan told Congress yesterday.
Exports
China's export growth slowed to 20 percent in January from 51 percent the previous month, the commerce ministry said yesterday. The figures weren't adjusted to allow for the Lunar New Year holiday, when Chinese workers get a full week off, and may have been affected by a reduction in export-related tax rebates at the start of this year.
On an unadjusted basis, industrial production rose 7.2 percent to 334 billion yuan ($40 billion) last month, the statistics bureau said today. China had 16 working days in January this year, down from 22 a year earlier, as the Lunar New Year began on Jan. 22 this year and Feb. 1 in 2003.
Chinese factories made about two-fifths of the world's color televisions and more than a third of all mobile phones last year. Motorola Inc., the world's second-biggest cell-phone maker, said it increased production in China by a third to 40 million units, of which as much as half were for export.
Cell Phones, Computers
The commerce ministry estimates China will make 170 million cell phones this year and as many as 30 million personal computers, including 8 million notebooks.
As more factories open and households acquire cars, computers and fridges, demand for energy is surging. That's stoking demand for steel pipelines, copper electricity cables and power stations.
China Petroleum & Chemical Corp., Asia's largest oil refiner, plans to raise 3.5 billion yuan selling bonds in China to fund new pipelines and upgrade plants. The company, known as Sinopec, said Monday it agreed to buy 54 percent more steel products -- mainly pipes -- from Shanghai-based Baosteel Group this year than it did in 2003. Shanghai Baosteel is China's largest steelmaker.
China plans to spend 19 billion yuan this year expanding power grids servicing eastern cities because electricity shortages, which caused factory closures across two-thirds of the country last summer, threaten economic growth, the official Xinhua news service reported last month. Some 200 billion yuan is earmarked for new power plants, the National Development Reform Commission said yesterday.
January's 19 percent industrial production growth was the fastest since records began in 1995, after adjusting for changes in the timing of the Lunar New Year holiday by combining previous figures for January and February. |
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