China's Industrial Production Growth Slowed to 16.2% 2004-07-09

China's industrial bouncy inflatables production growth slowed in June for a fourth month, adding to evidence that government lending curbs(信贷控制) are cooling the world's fastest-growing major economy.

Production rose 16.2 percent from a year earlier after gaining 17.5 percent in May, the National Bureau of Statistics said in a statement in Beijing. The growth rate, which peaked at 23.2 percent in February, is almost triple the rate in the U.S., the world's largest economy.

"Clearly the measures are working," said Qu Hongbin, an economist at HSBC Holdings Plc in Hong Kong. "Production is slowing but not collapsing."

The slowdown is damping export growth in Asian neighbors including South Korea and Taiwan, which are relying on overseas sales to revive their economies. It's also reducing pressure on China's central bank to raise interest rates for the first time in nine years.

"It seems there isn't a need to roll out more measures," said Louis Wong, who manages $25 million at Phillip Asset Management (H.K.) Ltd. "The government expects second-half growth to slow to a more sustainable level."

The Hang Seng China Enterprises Index, which tracks 37 mainland companies, or H shares, closed 0.3 percent higher in Hong Kong at 4315.30. The increase in China's June production was slightly less than the median 16.5 percent gain forecast in a Bloomberg News survey of seven economists.