China's industrial production increased at its slowest pace this year, a result of weaker export growth and the government's efforts to cool the economy.

 

Output rose 17.3 percent in November from a year earlier, slower than a gain of 17.9 percent in October, the National Statistics Bureau said this morning.

 

Weaker global growth may further curb overseas shipments after China lowered tax incentives for exporters this year. The government has cracked down on bank lending to prevent the economy from overheating after inflation jumped to an 11-year high in November.

 

Output of steel products rose 12.7 percent in November from a year earlier after gaining 17 percent in October. Raw steel increased 4.3 percent, slowing from 13.5 percent.

 

Textile output rose 14.3 percent, down from 15.3 percent. Vehicle production grew 21.7 percent, slowing from 24.3 percent.

 

Industrial production rose 18.5 percent from a year earlier for the first 11 months, the bureau said.

 

Exports growth slowed to 22.6 percent for the past four months from the 29 percent pace through July because of cuts to export rebates, weaker United States demand and higher prices due to currency gains and production costs, Bloomberg news said.

 

China last week announced the largest increase since 2004 in the proportion of deposits that lenders must hold as reserves, a one percentage point jump to 14.5 percent. The People's Bank of China has raised interest rates five times this year, pushing the one-year lending rate to a nine-year high of 7.29 percent.

 

The government this week said state-owned companies will be required to pay dividends of as much as 10 percent next year, a curb on growth in fixed-asset investment that the State Council, or cabinet, describes as "too rapid'' and a "prominent problem.''

 

Inflation accelerated to 6.9 percent in November and the trade surplus pumped US$26.3 billion into the economy, government agencies said yesterday. The government this month named inflation and overheating as the biggest threats to growth in 2008.

 

(Shanghai Daily December 13, 2007)