Factories given lower energy use targets

The mainland's power output rose faster than expected in August, reflecting accelerated industrial production growth and hot weather throughout much of the nation, according to the National Bureau of Statistics. But output is set to slow in the coming months as autumn sets in and external demand weakens.
Power output jumped 12.6 per cent to 390.33 billion kilowatt hours, the statistics bureau said. It was 1.1 percentage points higher than the 11.5 per cent year-on-year growth recorded in July.
The number was in line with the August industrial production growth figure of 13.9 per cent, which was released by the statistics authority over the weekend.
"Both power and industrial figures beat our expectations," said Li Huiyong, chief economist with Shenyin Wanguo Securities.
"Overall, the trend will be downward, though it is difficult to predict how much slower the growth will turn out to be."
For the first eight months of this year, power output climbed 17.2 per cent.
The statistics bureau released a string of economic numbers on Saturday, triggering heated debates about the outlook for the world's second-biggest economy.
Industrial output was among the bright spots, but economic analysts pointed out that it would be short-lived due to Beijing's curbs on energy-intensive industries.
"While the rebound in August activity data was very encouraging, recent evidence suggests more headwinds since early September as many local governments stepped up the closure and suspension of many heavy industrial producers," Goldman Sachs said in a report.
"Under the close inspection and pressure from the central government, local governments started to suspend industrial electricity supply to meet the energy consumption and environmental targets in the 11th five-year plan."
Cheng Siwei, a former vice-chairman of the National People's Congress, said yesterday that Beijing is strong enough to enforce its target of reducing energy intensity.
Analysts also expect slower export growth because of shrinking overseas demand, which is likely to dent power production and industrial output. In August, fixed-asset investment grew 24.2 per cent from a year earlier, while real-estate investment last month grew 34.1 per cent from a year ago.
Housing prices in the mainland's 70 major cities remained nearly unchanged in August from the previous month.
Beijing is expected to accelerate the construction of lower-cost houses for low-income residents, a move that may help to curb the red-hot property market.
It is expected that fixed-asset investment growth will slow in an orderly pace as Beijing attempts to achieve a "soft landing," Li said.
China's economy has shown increasing signs of asset bubbles since the beginning of the year after commercial banks granted 9.6 trillion yuan (HK$11.01 trillion) in loans last year to support infrastructure construction. Regulators set a full-year loan quota of 7.5 trillion yuan for 2010.