China industrial output surges 20%

  • Business
  • Wednesday, 12 Mar 2003

BEIJING: China said yesterday its industrial output surged 19.8% in February from a year ago as the booming electronics and car industries fuelled the fastest growth in nearly eight years. 

“The number is fantastically good. It probably reflects the fact that China’s exports are doing quite well and domestic demand is also quite strong,” said Dong Tao, a senior economist at Credit Suisse First Boston in Hong Kong. 

A US-led war on Iraq, however, could dim the sparkling performance, analysts said. 

The danger is not that war would affect China directly – although a long-term rise in oil prices would be painful for the world’s third biggest oil consumer – but that sluggish economies elsewhere would eventually cut demand for Chinese goods and force factories to ease back. 

“We do expect exports to moderate in the coming months, though it’s hard to quantify the pace of slowdown given the uncertainty in the Middle East,” Tao said. 

Electronics and cars have been at the forefront of China’s recent industrial growth. 

Rising incomes, falling import tariffs and an explosion of compact models have made cars, once ultra-luxury items all but unobtainable by average Chinese, more affordable than ever. 

The State Statistical Bureau said vehicle output rose 62% in the first two months of this year to 627,000 units. Of that, 242,000 were cars, a jump of 140%. 

Analysts said the car boom had boosted other industries like steel, plastic and rubber. 

Electronic products have also become must-have items for many Chinese, for whom sporting the latest colour-screen mobile phone or wide-screen television is a badge of success. – Reuters  

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