China's industrial output slowed down in May, due to the central government's efforts to cool down the economy.

Industrial output rose 17.5 percent in May in comparison to the same month of last year, the National Bureau of Statistics said Thursday.

The growth rate was 1.6 percentage points lower than the previous month.

Zhang Liqun, a senior researcher with the State Council Development Research Center, said the slower growth suggests the central government's macro-control measures have taken effect.

China took a raft of measures beginning last year to try to cool down the economy, including raising bank reserve requirements three times and curbing unwanted fixed asset investment projects.

The latest moves to cool growth have included the issue of tighter restrictions on new projects in "overinvested" industries like property and steel and ordering banks to keep more money in reserves instead of lending it out.

"Due to those efforts, the country's economy won't become overheated," Zhang said.

But Zhang Xueying, a senior economist with the State Information Center, said the industrial growth in May was still at a higher level.

"If the country wants to maintain a gross domestic product growth of about 8 percent, industrial growth should be at about 14 percent," Zhang said.

Zhu Jianfang, an economist at China Securities, said the country's industrial growth will continue to be at a higher rate until the third quarter, when it is expected to drop to about 15 percent.

According to the statistics bureau, output of energy products and raw materials as well as some hot consumer products maintained high growth, but output of most other products showed a significant slowdown compared to May 2003.

Output of crude oil, natural gas and electricity generation grew 1 percent, 17.3 percent and 16.6 percent, respectively, compared with a year ago.

Steel production, a sector targeted by the government in its drive to reduce investment, rose 14 percent in May, 9.4 percentage points lower than the previous month.

China's industrial output grew 17 percent last year, and its gross domestic product grew 9.1 percent.

(China Daily June 11, 2004)