August's figure was unchanged from 8.1 percent year-on-year growth recorded in July, but down steeply from a 12.8 percent gain in August last year, according to data from the National Bureau of Statistics.

Factory production in the heavy industries increased by 8.3 percent in August from a year earlier, weaker than a growth rate of 8.8 percent reported for July, the bureau said.

Heavy industrial plants, the producers of machinery and equipment, have been among the main beneficiaries of a government drive to keep the economy humming by pouring money into the upgrading of state firms.

The fact that output growth in heavy industries is now slowing could indicate the government's spending is less effective in boosting growth than before.

China began pulling the fiscal levers in 1998 in the wake of the regional economic crisis, in what was originally thought of as a stop-gap measure to maintain growth high enough to prevent massive unemployment.

A bright spot in August was improved exports of industrial products, with growth at four percent, up from 2.7 percent in July.

It was the first time in four months that the growth rate of industrial exports had risen, the bureau said.

Producers of electric equipment and accessories in particular reported better sales, as exports of these products rose 10.1 percent in August from the year before, compared with a decline of 0.4 percent in July.

In the first eight months of the year, industrial output rose 10.4 percent from the same period in 2000, according to the bureau.

(chinadaily.com 09/11/2001)