Higher production costs slow annual rise in industrial profit
By Wang Yanlin |
November 27, 2010, Saturday
|
Print Edition
Print Edition
CHINA'S industrial companies reported a slower annual profit growth of 51.6 percent in the first 10 months of this year, reflecting higher production costs.
Their net earnings expanded to 2.83 trillion yuan (US$421 billion) in the 10 months through last month, the National Bureau of Statistics said yesterday. The pace moderated from the jump of 53.5 percent in the first three quarters and 55 percent in the period through August.
Of the 39 industries tracked, 37 reported their profit managed to grow on an annual basis, one unnamed industry returned to black, and only the petroleum refinery sector saw profit fall 8.2 percent from a year earlier. Compared with the first nine months, 24 industries said the pace of their on-year profit growth slowed in the January-October period.
"Higher production costs are a major reason," said Li Maoyu, an analyst at Changjiang Securities Co. "Manufacturers have to pay more to buy raw materials, and the trend will extend into at least the first half of next year."
China's Producer Price Index, the factory-gate measure of inflation, swelled 5 percent year on year in October, accelerating from the 4.3-percent rise a month earlier.
Prices of raw materials, fuel and power rose 9.8 percent from a year earlier in the first nine months.
Zhu Hongren, a spokesman for the Ministry of Industry and Information Technology, said last month that higher productions costs as well as a rapidly appreciating yuan threaten many Chinese industries, especially exporters.
Industrial manufacturers also face higher costs in labor, land use, financing and energy, making it difficult for them to develop in a stable manner, Zhu said.
Their net earnings expanded to 2.83 trillion yuan (US$421 billion) in the 10 months through last month, the National Bureau of Statistics said yesterday. The pace moderated from the jump of 53.5 percent in the first three quarters and 55 percent in the period through August.
Of the 39 industries tracked, 37 reported their profit managed to grow on an annual basis, one unnamed industry returned to black, and only the petroleum refinery sector saw profit fall 8.2 percent from a year earlier. Compared with the first nine months, 24 industries said the pace of their on-year profit growth slowed in the January-October period.
"Higher production costs are a major reason," said Li Maoyu, an analyst at Changjiang Securities Co. "Manufacturers have to pay more to buy raw materials, and the trend will extend into at least the first half of next year."
China's Producer Price Index, the factory-gate measure of inflation, swelled 5 percent year on year in October, accelerating from the 4.3-percent rise a month earlier.
Prices of raw materials, fuel and power rose 9.8 percent from a year earlier in the first nine months.
Zhu Hongren, a spokesman for the Ministry of Industry and Information Technology, said last month that higher productions costs as well as a rapidly appreciating yuan threaten many Chinese industries, especially exporters.
Industrial manufacturers also face higher costs in labor, land use, financing and energy, making it difficult for them to develop in a stable manner, Zhu said.
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