China's 4% Fall in Electricity Output May Portend Worse Economic Slump

RDX : GDP和电量正相关

SHANGHAI -- China reported its first decline in monthly electricity output in four years, one of the strongest signs so far that the country's economic slowdown may be worse than thought.

The 4% decline in power generation in October from a year earlier, announced Thursday by the National Bureau of Statistics, deepens what has become the most severe falloff in electricity output in a decade. Analysts expect further falls in months ahead as manufacturers cut back on power use in the wake of slowing orders from the U.S., Europe and other major export markets.

Also Thursday, China's government reported the weakest growth in manufacturing output in four years, saying that value-added industrial production rose 8.2% in October from a year earlier. That number was far slower than September's 11.4% gain and well below the median 10.8% rise forecast by 13 economists surveyed by Dow Jones Newswires. The growth rate for last month was less than half that of October 2007, when it grew nearly 18%.

The slowdown was driven by a falloff in activity in heavy industry, including a 17% plunge in production of pig iron and crude steel in October, and a 0.7% fall in output in the automobile sector -- until recently one of China's fastest-growing industries.

Analysts expect the slowdown in power production to continue despite a package of government and expected private-sector spending valued at as much as four trillion yuan ($586 billion) that Beijing unveiled Sunday to stimulate the economy.

Reflecting the government's emphasis on its stimulus package -- as well as its continued control over the nation's banking system -- four of China's biggest banks disclosed plans Thursday to increase lending as part of the effort to bolster the economy.

China Development Bank, China Construction Bank Corp., and Agricultural Bank of China pledged new loans of as much as $28 billion, while Bank of China Ltd. said it would also boost lending but didn't specify the amount. The loans will be mainly for agriculture, infrastructure, small and midsize companies and affordable housing.

—Jing Yang