China's power data point to positive signs, pressure

BEIJING - Slightly higher power consumption in the first half of 2014 indicated China is still battling to arrest a slowing economy, analysts said.

China's power consumption, an important indicator of economic vitality, rose 5.3 percent from a year ago to reach 2.63 trillion kwh, according to the National Energy Administration on Tuesday.

"Although changes in power consumption were not big, they kept the momentum of steady growth," said Liu Zhu, an electricity analyst at China Credit Rating.

In June alone, power use increased 5.9 percent from a year ago, up 0.6 percentage points from the growth in the previous month.

Liu expects power consumption to continue its slow growth in the short run as the economy needs to gain steam further.

Other indicators, including the purchasing managers' index (PMI) and exports, show signs that the economy is consolidating, even if the signs are still weak.

The Chinese economy expanded 7.4 percent in the first quarter of 2014, insignificantly lower than the year's growth target of 7.5 percent. Wednesday will see release of a string of broad economic indicators, including GDP.

The power consumption data in the first half of the year fell short of a 6 percent projection by the China Electricity Council, which in May maintained its forecast of 7 percent growth for the whole year.

"The latest data are in line with the general economy," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

Lin warned that the economy is still under pressure as the electricity consumption growth was still lower than the full-year GDP growth target.

During the January-June period, electricity use by primary industries dropped 4.6 percent year on year. Power consumption by the industrial sector rose 5.1 percent while that by tertiary industries went up 6.9 percent.

In the first half, private homes and the service sector contributed more to the entire electricity use, indicating that economic restructuring has gained traction, Lin said.

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