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Industrial dynamic crucial against economic slowdown

(Xinhua)
Updated: 2008-12-08 07:20

China's infrastructure construction has gone up a gear after the massive capital input announced by central government at the beginning of November. But still a number of industries are suffering the domino effect of the deepening global financial crisis.

Henan Provincial Statistical Bureau chief Liu Yongqi said that to give the Chinese economy "a boost strong enough", "the government needs to optimize its investment to facilitate industrial dynamic so as to secure production and employment."

Chain Reaction

Field survey by Xinhua reporters showed that even the less export-oriented central interior -- namely, Henan, Anhui, Shanxi, Hubei, Hunan and Jiangxi provinces -- have started to feel the pinch of slowing world economy. Industries like textile, automobile, steel, coke and coal, iron ore and minerals have seen many enterprises, especially private and smaller ones, slip into the doldrums over the past three months.

Immediate results are shrinking power consumption, rising inventory, more payment default and tighter capital flow on the corporate side and reduced tax revenue on the government side.

In Shanxi's Changzhi City where coal, coking and iron making generated 80 percent of local productive value, a slew of enterprises have ceased production since October or had to operate under capacity.

Changping Group, the city's largest private iron and steel maker, has lost so far more than 400 million yuan from a combination of raised production costs and shrinking market demand. The first 10 months have seen its iron and steel output decline by 80 percent over the same period last year.

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