China's power consumption rose strongly in July but this did not mean a strong recovery was under the way, said Ouyang Changyu, deputy secretary of the China Electricity Council.

Power consumption, which premier Li Keqiang touts as a leading indicator of China's economic soundness, rose 8.8% year on year to 495 billion kilowatt hours in July. However, Ouyang said the steeper rise was a result of the unusually hot weather and a low base a year earlier rather than economic recovery.

In the first 7 months, power consumption was up just 5.7% year on year; the growth rate was largely flat compared with the same period of last year, Ouyang noted.

In July, power consumption was down 5.5% in the primary sector, up 8.1% in the secondary sector, up 13.4% in the tertiary sector and up 12.3% by civilian consumption. The tertiary sector and civilian consumption was closely linked to the hot weather.

In July, power consumption by heavy industries was up 7.7% year on year, where the top four energy-intensive industries – chemicals, building materials, nonferrous metals and ferrous metals processing – was up only 3.7%, much slower than the 14.2% pace of the catering, hospitality and commercial industries combined.

Although industrial power consumption would also increase in the summer, we need to analyze of such data of at least 3 months in a row to confirm if industrial production picks up, Ouyang said.

The secondary sector and tertiary sector was responsible for 74% and 12% respectively of total power consumption in the first 7 months. The tertiary sector posted a faster growth but it is still a long way to go for it to represent an apparently greater share of total power consumption, according to Ouyang.

For a kilowatt hour of electricity, GDP generated by China's tertiary sector is 6.5 times that by the secondary sector, according to the State Grid Electricity Research Institute.

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