China Resources

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UPDATE 1-China says Jan-Sept GDP up 9.5 percent yr/yr
Thu Oct 21, 2004 10:37 PM ET

BEIJING, Oct 22 (Reuters) - China's economy expanded 9.5 percent in the first nine months of the year as Beijing reined in breakneck investment and lending, official data showed on Friday.

Economists said the data showed evidence of a measured slowdown in the economy, possibly reducing the need to raise interest rates and taking heat off the yuan currency.

The consumer price index for September was 5.2 percent higher than a year earlier, compared to a median forecast of 5.3 percent from a Reuters survey of economists, the National Bureau of Statistics said in a report on Friday.

Consumer prices rose an annual 4.1 percent in the first nine months of the year, it said, while retail sales were up 13.0 percent in the first nine months compared with the year-earlier period.

Overall fixed-asset investment for the first nine months was up 27.7 percent from a year earlier.

Tim Condon, economist with ING in Singapore, said the figures supported indications the government's credit curbs and austerity measures were working.

"The modest slowdown in fixed asset investment and the pronounced slowdown in inflation are what the authorities want to see," he said. "Loosening the tightening measures is their next step. I think they can declare victory and start to remove them."

Industrial output rose an annual 17 percent in the first nine months of 2004, while fixed asset investment in urban areas rose 29.9 percent in the same period compared with a year ago.

Zheng Jingping, spokesman for the bureau, said China still had the potential to show high investment, high producer prices, continued energy shortages and rising industrial inventories.

"We should further enhance and expand the achievements of macro-control to guard against a rebound of those problems," he said in a statement.