Industrial firms see profit fall at slower pace
By Richard Fu |
July 28, 2012, Saturday
|
Print Edition
Print Edition
PROFIT at China's industrial companies fell 1.7 percent in June from a year earlier, slowing from May's 5.3 percent drop, official data showed yesterday, indicating economic activity may be stabilizing.
Major Chinese factories made combined profits of 468.2 billion yuan (US$73.3 billion) in June, the National Bureau of Statistics said.
In the first half, industrial profit fell 2.2 percent to 2.31 trillion yuan, easing from a decline of 2.4 percent in the January-May period.
The Ministry of Industry and Information Technology said this week that there are signs from the industrial sector that the economy has started to stabilize after the government stepped up policy easing and stimulus measures.
However, there remained lingering uncertainties that may bring fresh shocks to the industrial growth as the foundation of the recovery was still fragile, said Zhu Hongren, chief engineer of the ministry.
The government has been moving to stimulate economic growth, including cutting interest rates and bank reserve requirement ratios, fast-tracking investment plans and subsidizing the purchase of energy-saving household electrical appliances.
"Industrial profit will continue to stabilize in the third quarter and rebound in the fourth quarter," Guotai Junan Securities analyst Lu Chunjie wrote in a note, attributing June's slower contraction to better profit margins.
Industrial profit at state-owned enterprises fell 10.9 percent in the first half while private-sector firms saw income increase 16.5 percent, the statistics bureau said. Foreign-invested industrial firms and those from Hong Kong, Macau and Taiwan recorded a profit fall of 13.4 percent.
The statistics bureau's survey covers industrial companies with annual sales of 20 million yuan or more.
Major Chinese factories made combined profits of 468.2 billion yuan (US$73.3 billion) in June, the National Bureau of Statistics said.
In the first half, industrial profit fell 2.2 percent to 2.31 trillion yuan, easing from a decline of 2.4 percent in the January-May period.
The Ministry of Industry and Information Technology said this week that there are signs from the industrial sector that the economy has started to stabilize after the government stepped up policy easing and stimulus measures.
However, there remained lingering uncertainties that may bring fresh shocks to the industrial growth as the foundation of the recovery was still fragile, said Zhu Hongren, chief engineer of the ministry.
The government has been moving to stimulate economic growth, including cutting interest rates and bank reserve requirement ratios, fast-tracking investment plans and subsidizing the purchase of energy-saving household electrical appliances.
"Industrial profit will continue to stabilize in the third quarter and rebound in the fourth quarter," Guotai Junan Securities analyst Lu Chunjie wrote in a note, attributing June's slower contraction to better profit margins.
Industrial profit at state-owned enterprises fell 10.9 percent in the first half while private-sector firms saw income increase 16.5 percent, the statistics bureau said. Foreign-invested industrial firms and those from Hong Kong, Macau and Taiwan recorded a profit fall of 13.4 percent.
The statistics bureau's survey covers industrial companies with annual sales of 20 million yuan or more.
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