- 10 May 2007 -
Chinese Government Concerned about Country’s Rapid Industrial Growth

With its economy rapidly accelerating, China could experience challenges managing growth if its industrial output continues to speed up, according to an article published this week by The Shanghai Daily. To address the situation, according to the National Development and Reform Commission (NDRC), China has to take more measures to rein in industrial production, which jumped 18.3% in the first quarter from a year earlier—the fastest pace for the same period in a decade.

"If the acceleration [in output] continues, it will not only raise economic growth, lead to over-consumption of energy and resources and increase pollution, but also make it more difficult to adjust economic structure, put pressure on economic stability and cause fluctuation in the economy," said Zhu Hongren, deputy director of the NDRC's economic operation bureau.

However, Zhu said second-quarter industrial output growth could be lower because of a relatively higher base in the second quarter last year. But intensive industrial consumption in the second quarter, a season of higher demand for manufacturing, could still lead to short supplies of coal, power and oil products in China, Zhu added.

Long-term factors, such as efforts to advance industrialization and urbanization, and short-term ones like robust demand from home and abroad and abundant supply of funds and electricity, were cited as reasons for the rapid industrial output growth in the first quarter. The NDRC, the mainland's top economic planning agency, also said the quick industrial expansion was a combination of a rapidly accelerating increase in bank lending, the widening trade surplus, and a rebound in fixed asset investment.