China's output slows amid inflation remaining

(ATTN: RECASTS throughout)
By Kim Young-gyo
HONG KONG, Aug. 9 (Yonhap) -- China's industrial output cooled down in July amid consumer prices surging to a 36-month high, government data showed Tuesday, putting the country's policy makers in a difficult position to navigate the world's No. 2 economy.
China has recently been seeking to maintain a strong growth, while continuing to battle record-high inflationary pressure at the same time.
The industrial output grew 14 percent on-year in July, a slower expansion than in June, the National Bureau of Statistics (NBS) said.
The July figure was down 1.1 percentage points from June.
Industrial value-added output measures the final results of industrial production, or the value of gross industrial output minus intermediate input, such as raw materials and labor costs.
Last month's growth in the consumer price index (CPI) was also up from a 6.4 percent gain in June, China's National Bureau of Statistics said.
China's inflation gauge grew more than 5 percent for the fifth straight month and exceeded 6 percent for the second month in a row since July 2008.
July's consumer inflation rate was higher than the average market estimate range of 6.2-6.3 percent.
Food prices led the overall CPI growth, jumping 14.8 percent from a year earlier and 14.4 percent from the previous month. They rose at a double-digit pace for the seventh consecutive month.
Non-food prices rose 2.9 percent, down from 3.0 percent in June. They still stayed at a high level, reflecting pass-alongs of higher raw material costs and property prices.
The agency also said the country's producer price index rose 7.6 percent on-year in July, indicating that consumer prices in the coming months will continue to face upward pressure.
Meanwhile, retail sales, the main gauge of consumer spending in the world's second-largest economy, rose 17.2 percent in July from a year ago.
The Chinese government is expected to continue to maintain its tightening measures, putting its top policy priority on reining in runaway inflation.
However, many market watchers worry that the move could drag down the economic growth, as the country faces increasing challenges from the global markets.
In a move to counter inflation, the Chinese government has started to roll back the stimulus package it introduced during the global financial crisis, while the central bank raised the benchmark interest rate for the third time this year in July.
ygkim@yna.co.kr