China industrial output surges
China's industrial output surged 18.1 per cent in May from a year earlier to harden the case for further policy tightening to dampen the world's fastest-growing major economy.
Economists, who had expected output growth to ease to 17.1 per cent from 17.4 per cent in April, said comments late yesterday by Premier Wen Jiabao about rising inflationary pressures suggested the government could act swiftly.
The benchmark index was down just 0.1 per cent in late morning, less than 4 percent below a record high scaled on May 29th before a sharp correction set in.
Booming exports, sustained fixed-asset investment growth and accelerating retail sales mean factories are firing on all cylinders despite rising interest rates and a government campaign against energy-intensive, polluting industries.
The economy expanded 11.1 per cent in the first quarter, compared with a year earlier, and economists said figures so far pointed to another quarter of double-digit growth.
The National Bureau of Statistics said output of transport equipment rose by 27.1 per cent from May 2006; motor vehicles by 25.7 per cent; machinery by 23.5 per cent; and cement 20.7 per cent.