MNI POLICY: China Blames Slow Industry Growth On Less Work Day

     BEIJING (MNI) - China's August macroeconomic indicators failed to meet

expectations and were worse than July. Fu linghui, a spokesman at the National

Bureau of Statistics, said one less work day as well as typhoons were partly

responsible for the slower growth in industry output. 

     Here are some key points from the briefing on Monday:

     - Industry output slowed to 4.4% y/y from 4.8% in July, the lowest this

year. "The economy's downward pressure indeed plays a factor," Fu said. The

recent loan prime rate pricing reform and reserve requirement ratio cuts by the

central bank have created good conditions for industrial companies, Fu said.

Shrinking global trade impacted exports of industrial products, he said.

     - The yuan will be stable given China's good long-term economic prospect

hasn't changed, even as higher value of the dollar and trade frictions with the

U.S. impacted the market, Fu said.

     - Infrastructure investment in Jan-Aug grew 4.2% y/y from 3.8% gain in the

first seven months. Fu said the government stepped up effort to boost

investment, including allowing local government to issue more bonds using next

year's quotas. 

     - Consumption of higher-value goods, including cosmetics and office

supplies as well as service maintained rapid growth, Fu said. Still, retail

sales grew by 7.5% y/y, falling from 7.6% in July and missed 8.1% forecast by

MNI. 

     - China has the basis and conditions to keep CPI within the ceiling of 3%,

said Fu, when commenting prices rose 2.8% y/y in August. Pork-driven price gains

will slow as supply improves under government policies to encourage pig

production, according to Fu.

     - The impact of the attack on Saudi oil field on the global energy market

"requires further observation," Fu said, noting that the August international

energy price dropped about 6% m/m, while the OPEC basket of crude oil prices

also fell.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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