China's industrial output rose by 16.2 per cent during the first two months of this year compared with the same period a year ago, an indication that the country's economy will continue to grow at a fast pace.

The National Bureau of Statistics said yesterday that industrial output reached 1.1 trillion yuan (US$137 billion) in January and February, as vehicle makers churned out more cars and trucks.

Total vehicle output rose 41 per cent year-on-year during the two months, with car production soaring 83 per cent, the bureau said in a statement.

The output for steel products grew by between 16.8 per cent and 21.3 per cent, while cement production rose 21.3 per cent.

Coal output rose 9.6 per cent from a year earlier and oil production rose 2.5 per cent.

"Industrial output growth remains strong," said Zhuang Jian, a senior economist with the Asian Development Bank's Resident Mission in China.

This situation suggests the country's economy will maintain last year's fast-paced development, he said.

He explained that industrial output is an important indicator for China's economic growth because it contributes about 50 per cent to total gross domestic product (GDP).

China's industrial output rose 16.4 per cent last year and its economy grew by 9.9 per cent.

"The economy will grow by more than 9 per cent during the first quarter of this year," he predicted.

Niu Li, a senior economist with the State Information Centre, agreed that the economy remains robust, judging from the industrial growth figures.

"This is mainly because of strong investment and accelerating consumer spending," he said.

The statistics bureau is scheduled to release investment growth figures today, but Niu said the figures should maintain last year's fast pace.

He added that the government's increasing emphasis on consumer spending will help boost the country's retail sales.

Earlier figures suggest China's retail sales rose 12.5 per cent year-on-year in the first two months of this year, a good result that the government expects will lessen the economy's dependence on exports and investment for growth.

"While city people continued their strong spending, rural people have increased their spending only gradually due to lower incomes," said economist Qi Jingmei of the State Information Centre. "This trend will continue for the rest of this year."

The three economists agreed that China's net exports will contribute less to GDP this year compared with 2005 due to increasing trade conflict and expectations that the value of the renminbi may rise further.

China's trade surplus fell to US$2.45 billion in February from US$9.49 billion in January, earlier figures indicate.

Due to the falling surplus, the country's economic growth could slow down, Niu said.

China's gross domestic product is estimated to rise by 9.6 per cent in the first quarter of this year and 9.4 per cent in the second quarter, he said