Related News

Home » Business » Economy

Industrial profit growth moderates in September

PROFIT growth of China's industrial companies slowed in September from the biggest monthly growth in three years, as low-base effects faded and capacity reduction campaign dragged on profits.

Profits in September rose 7.7 percent to 577.1 billion yuan (US$85.2 billion), slowing sharply from August's 19.5 percent jump, the National Bureau of Statistics (NBS) said on its official website today.

Industrial profits in January-September period rose 8.4 percent from a year earlier to 4.64 trillion yuan, in line with the previous eight-month period growth figure.

The agency said the month-over-month moderation was partly because profits in August 2015 were especially weak due to the stock market crash, while profits in industries such as electronics, steel and electricity were hit by a drop in growth, said NBS official He Ping in a separate note interpreting the data.

State-owned sector "is doing well", said Zhou Hao, an economist at Commerzbank AG, as profit growth of state-owned enterprises expanded to 47.6 percent in September, exceeded a 39.4 percent growth last month.

Ferrous metal production including steel is leading the charge with a 272.4 percent jump in the first nine months versus a year ago, followed closely by a 263.8 percent jump for oil refining earnings.

Recent indicators showed China's economy was stabilizing, as it grew 6.7 percent in the third quarter from a year earlier, same from the previous quarter, as increased government spending and a property boom offset stubbornly weak exports.

Yet the NBS said in a statement that foreign and domestic demand remains weak, and coal and steel companies have taken on more debt.

"The biggest challenge facing companies is to strike a balance between cutting debt and making a profit," said Zhou, "Controlling debt risk now becomes a priority for the government as corporate profits have been stabilized."

Policy makers are stepping up efforts to curb risks from rampant growth in shadow banking products, elevated corporate debt and surging home prices. Early private indicators for October give mixed readings, reflecting tension between resilient domestic demand and fresh challenges as policy switches to reining in financial risks.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend