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Thursday, August 14, 2008

China's Industrial Output Slows in July 2008

China's industrial production grew at the slowest pace since February 2007 on weaker export orders and factory shutdowns to clear the air for the Olympic Games. Production rose 14.7 percent in July from a year earlier, the statistics bureau said today, after gaining 16 percent in June.

Weakness in economies around the world have reduced orders for export products, while higher fuel and raw-material prices deterred some companies from expanding. The slowdown, exacerbated by attempts to prevent pollution in Beijing during the Olympics, suggests an acceleration in China's July export growth is unlikely to be sustained.

The yuan fell to 6.8620 against the dollar as of 5:05 p.m. in Beijing after closing at 6.8570 yesterday.

Textile output rose 10 percent in July from a year earlier after gaining 12.4 percent in June. Steel products growth weakened to 7 percent from 11 percent. Cement output rose 6.3 percent, down from 7.9 percent. Growth in electricity output slowed for the fourth straight month, climbing 8.1 percent after an 8.3 percent gain in June.

China's economy expanded 10.1 percent in the second quarter from a year earlier, down from 11.9 percent in all of 2007. Still, rising domestic demand may help sustain industrial production to some extent. Retail sales jumped 23.3 percent in July from a year earlier.

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