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Tuesday, September 13, 2016, 12:20

China's factory output grows 6.3% in August

By Xinhua

China's factory output grows 6.3% in August
Chinese workers load steel pipes at a port in Lianyungang in east China's Jiangsu province on Sept 8, 2016. (STR / AFP)
BEIJING - China's value-added industrial output, an important economic indicator, increased mildly in August - an encouraging sign for a slowing economy.

Industrial output expanded 6.3 percent year on year last month, faster than the 6-percent increase for July and the 6.1 percent posted for the same period of last year, according to data from the National Bureau of Statistics (NBS) on Tuesday.

Industrial output measures the output of Chinese companies with annual main business revenue of more than 20 million yuan (US$3 million).

China's factory output grows 6.3% in August
Sources: National Bureau of Statistics.

According to the breakdown, the industrial output in less-developed western regions rose 7.9 percent, followed by 7.8 percent for central regions and 7.2 percent in the east.

However, northeastern areas plagued by serious overcapacity did not fare so well, with a 2-percent output drop.

By sectors, automobile manufacturing jumped 21.4 percent in August, followed by 11.5 percent in the pharmaceutical sector and 10.6 percent in electronics manufacturing, NBS said.

In the first eight months, industrial output increased 6 percent from a year ago.

Weak private investment

Fixed-asset investment by the private sector remained weak despite government attempts to stimulate growth, official data showed on Tuesday.

Fixed-asset investment by the private sector in China increased 2.1 percent in the first eight months, unchanged from the growth seen in the January-July period, according to the National Bureau of Statistics (NBS).

In contrast, state-sector investment surged 21.4 percent during the period.

The torpid growth of private investment this year has concerned policymakers as the private sector regularly contributes more than 60 percent of China's GDP growth and provides over 80 percent of jobs.

Some analysts attributed the decline to the slowdown in the export manufacturing and real estate industries, the two sectors most favored by private investors, combined with the deterioration in business confidence over the past few years.

In infrastructure and some service industries, such as railways and health care, state-linked companies still dominate meaning less opportunities for private investors.

To encourage private investment, the State Council has taken gradual steps to level the playing field. Infrastructure projects that were previously off-limits have been gradually opened up and in November 2014, six new areas -- environmental protection, agriculture, water, urban utilities, transportation and energy - were liberalized.

At the local level, however, where the actual work takes place, lax implementation and red tape remain major hurdles.

To arrest the investment slowdown, the State Council earlier this year sent inspectors to local regions to investigate how central policies on private investment are put into practice.

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