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China's industrial growth slows further
By JOE McDONALD,AP Business Writer AP - 1 hour 50 minutes ago
BEIJING - The growth in China's factory output fell to its lowest level in more than seven years, data showed Monday, as trade plunged, adding to the threat of heavy job losses that could fuel unrest.
Industrial output rose 5.4 percent in November from a year earlier, the National Bureau of Statistics reported. That was down from October's 8.2 percent, which the government said at the time was the smallest gain since 2001.
The sharp decline in output growth could have a far-reaching impact as Chinese factories cut imports of raw materials and lay off workers.
"China's industrial production growth could fall further in December, as a growing number of manufacturers cut production in response to weaker global demand," said Jing Ulrich, JP Morgan's chairwoman for China equities, in a report to clients.
Communist leaders have warned of rising instability due to job losses and are pressing employers to minimize layoffs as Beijing rolls out measures to insulate China from the global economic slowdown.
A slowdown in industrial growth was expected after China's exports fell in November for the first time in seven years.
Labor protests have occurred in Guangdong province in the southeast, a hub for export-driven manufacturing.
Over the weekend, the Cabinet announced it will increase China's money supply, or the amount of money circulating through the economy, by 17 percent next year to boost consumer spending and insulate the country from the global downturn.
That came on top of a 4 trillion yuan ($586 billion) stimulus package announced in November that is meant to create jobs and spur economic growth through higher spending on construction and other projects.
The drop in industrial activity could be especially painful for China's Asian neighbors and economies as far away as Australia and Brazil that supply industrial components, iron ore and other raw materials.
Half of China's nearly $1 trillion in imports last year was industrial components used in goods that were re-exported. Other foreign materials were used in steel and other goods for which domestic Chinese demand also has dropped.
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National Bureau of Statistics (in Chinese): http://www.stats.gov.cn
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