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China industrial profit posts slower growth in November
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Chinese manufacturers saw their profit growth slowing sharply in November mainly due to a higher comparative base and a recent slowdown in investment.
Industrial profit expanded 9.7 percent from a year earlier to 707.5 billion yuan (US$115 billion) last month, down from a rate of 15.1 percent in October and 18.4 percent in September, the National Bureau of Statistics said today.
He Ping, researcher at the bureau, linked the slowdown to a higher comparative base. Earlier data showed industrial profit jumped 21.6 percent and 22.8 percent respectively in October and November of 2012.
He said the growth remained stable on the whole, averaging 13.2 percent in the first 11 months, to reach 5.32 trillion yuan.
Zhu Haibin, chief economist for China at JPMorgan, said the moderation followed a slowdown in industrial investment and a strong recovery in the third quarter. Industrial investment grew 18.6 percent in November, compared with 19.1 percent in October.
"What's worrisome is that the recovery in net profit continues to occur in just a few sectors and profits from principal businesses continued to stay on the softer side," Zhu said.
According to the bureau, profit growth was mainly bolstered by five sectors, namely, power generation, automobile, petroleum, ferrous metals and non-metallic mineral products. These five industries accounted for 56.7 percent of total industrial profit.
Meanwhile, profits from manufacturers’ principal or core businesses declined 1.8 percent year on year, compared with a rise of 6 percent in October.
"Entering 2014, manufacturing investment could stabilize, thanks to continued recovery of the global economy, gradual adjustment of manufacturing capacity, and the price reform on the domestic front," Zhu said.
But some analysts warned against the risks of a slower growth in the world's second-largest economy. Xue Jun, economist at CITIC Securities Co, said the Chinese economy has shown signs of weakness in recent two months.
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