Government unveils package to boost domestic consumer demand amid recession fears.
“There are many reasons for this. The international financial crisis is certainly one of those factors.”
News of the slowdown coincided with comments from Wen Jiabao, the Chinese premier, that the impact of the global financial crisis on China was “much worse” than expected.
China’s leaders had initially said the crisis would not cause too much harm to the Chinese economy.
|Falling demand has seen many factories close and thousands put out of work [EPA]|
But with the drying up of credit and confidence levels plummeting among consumers and manufacturers, recent days have seen the signals from Beijing change markedly.
On Sunday officials unveiled a stimulus package worth some $590bn aimed at lifting economic growth, although it was unclear how much was actually new spending.
And on Thursday reports said Chinese ministries had been allocated an extra $15bn as the government stepped up efforts to boost the economy and consumer spending.
The China Daily newspaper said that in addition the State Grid Corp of China which operates most of China’s electricity-distribution network, would invest $400m to expand power grids in central and western China.
According to Thursday’s industrial output figures, several key product categories either grew by single digits or declined in October compared with a year earlier.
For example, car makers produced 730,000 vehicles in October, a drop of 0.7 per cent from a year earlier, while the production of crude steel was down 17 per cent over the same period.
Exports of industrial products were up by just 6.8 per cent from October 2007.