Economy

Industrial output growth to slow in 2011

By Tuo Yannan (China Daily)
Updated: 2010-12-28 09:34

An employee engaged in welding work at Fujian Dongshan Glass Factory. The Ministry of Industry and Information Technology expects an average annual industrial output growth rate of 10 percent and a reduction in energy consumption and carbon emissions per unit of output by 16 percent in the next five years. [Photo / China Daily]

Figure expected to remain around 10 percent over the next five years

BEIJING - China's 2010 industrial output growth rate is estimated to reach 15 percent, while next year's figure will drop to 11 percent, Li Yizhong told a meeting on Saturday, a day before standing down as minister for industry and information technology.

The slowdown in output shows that the government will adopt a more stable development blueprint in 2011, industrial analysts told China Daily on Monday.

The main targets for Chinese industry next year will be restructuring, energy efficiency and technological innovation, according to Li, who was succeeded at the ministry by Miao Wei.

Li said that the nation's industrial investment is expected to grow 19 percent next year, including information technology, and energy consumption per unit of industrial output is expected to decline 4 percent year-on-year.

For the next five years, the ministry expects an average annual industrial output growth rate of 10 percent and a reduction in energy consumption and carbon emissions per unit of output by 16 percent.

Industrial companies experienced a slowdown in growth between January and November this year, and the downward trend is expected to continue in the near future, which will help maintain stable economic development, analysts said on Monday.

Industrial companies' profits surged 49.4 percent year-on-year during the first 11 months of this year, compared with an increase of 55 percent during the first eight months, according to the National Bureau of Statistics.

The figures, released every three months, cover State and private businesses with annual sales of more than 5 million yuan ($753,900) in 39 industries, including steel, chemicals, electricity, telecommunications and mining.

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"The increase in profits will alleviate the market's concerns over a second dip, and contribute to the country's soft landing," said Yang Tianming, an analyst with Guolian Securities Co.

Li Yaming, an analyst with Changjiang Securities Co, agreed with Yang, adding that slowdown in the growth of industrial profits is likely to continue, as the country's industrial upgrading and restructuring remain underway.

In addition, the decline will also contribute to containing GDP growth at around 8 percent next year, in line with the government's target, he said.

"The slowdown is expected to continue until the second quarter of 2011," Li said.

Out of 39 industries, every sector except petrol, coke and nuclear fuel processing achieved profit growth compared with last year.

During the 11-month period, profits in chemical fiber manufacturing jumped 120 percent year-on-year, ferrous metals mining and dressing grew 110 percent year-on-year, and petroleum and natural gas mining increased 65.7 percent year-on-year, official figures showed.

Li added that next year the government will encourage private capital to enter the telecom and defense sectors, and improve Chinese companies' technological innovation ability.

The government will advocate high-quality and value-added imports and control strictly highly-energy intensive and highly polluting exports. Qualified companies will be encouraged to develop abroad for acquisition and manufacture, said Li.

Miao Wei assumed the position of minister of industry and information technology on Dec 26.