BEIJING: China’s economy is bouncing back strongly from the impact of the Severe Acute Respiratory Syndrome (SARS) outbreak, with exports and factory output surging in June from a year ago, as production of passenger cars jumped almost 83%.
But the data released by the government yesterday may renew concern that the economy, one of the world’s fastest growing, could be in danger of overheating.
“Everything’s stronger than we thought,” said Jun Ma, an economist with Deutsche Bank in Hong Kong.
June industrial output was a powerful 16.9% higher than a year ago as sectors from foodstuff to petroleum processing rebounded after the SARS outbreak, the State Statistical Bureau said in a statement. “Production at those industries that were relatively hard hit by SARS showed clear recovery.”
The strong factory data for June could fuel growing concerns that the economy is overheating. Some economists fear inflation could re-ignite, or that dangerous bubbles are forming in sectors such as property.
“I think it’s too high for China,” Ma said of the June industrial data. “If it continues like this it will further increase inflationary pressure.”
The authorities were trying to curb a surge in the money supply and ease back on fixed asset investment which had created booming output of such goods as steel, cement and chemicals, Ma added.
Industrial output rose 13.7% during the 12 months to May, and 14.9% in the year to April. Output for the first six months was up 16.2% on a year ago, the bureau said.
Passenger car production, which was strong even at the height of the SARS outbreak, was nearly 83% higher in June than a year ago, with output hitting 179,000 vehicles.
Exports, which kept up strong growth amid the outbreak, were a massive 32.6% higher in June at US$34.5bil, the Commerce Ministry said on its website.
But in a sign that China’s export juggernaut is being fed by foreign raw materials and components, imports in June surged 40.1% from a year ago to US$32.3bil. – Reuters
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