Industrial profit growth slips
By Wang Yanlin |
July 29, 2010, Thursday
|
Print Edition
Print Edition
INDUSTRIAL profit in China grew at a slower pace in the first six months of this year, reflecting moderation in the country's industrial output and overall economic growth.
Analysts said the economy may continue to slow this year but it will pick up again in 2011 or 2012 when domestic consumption becomes the main driver of growth.
Net earnings of Chinese manufacturers increased 71.8 percent from a year earlier to 1.61 trillion yuan (US$235.9 billion) through June this year. The rate was down 11.2 percentage points from the pace in the first five months, the National Bureau of Statistics said yesterday.
The profit figures cover state companies and private businesses in 39 industries with annual sales of more than 5 million yuan.
"The smaller profit growth was expected given the moderation in industrial production," said Li Maoyu, an analyst at Changjiang Securities Co. "With producer prices staying high and more restrictive policies to curb pollution, the growth rate may continue to fall the rest of this year."
China's industrial production grew 13.7 percent year on year in June, compared with a 16.2 percent rise in May. It was the third consecutive month that slower growth in industrial output was recorded.
The weaker expansion came after the country enhanced efforts to control energy-intensive industries.
The pace of industrial production may slow further this month as exports may be hurt by the end of some tax rebates.
Effective two weeks ago, tax rebates were dropped on 406 types of exports, including some steel and non-ferrous metal products, fertilizers, plastics, rubber and glass products.
But some analysts remained optimistic about the manufacturing sector, betting on the vast potential of domestic demand to boost the economy.
Analysts said the economy may continue to slow this year but it will pick up again in 2011 or 2012 when domestic consumption becomes the main driver of growth.
Net earnings of Chinese manufacturers increased 71.8 percent from a year earlier to 1.61 trillion yuan (US$235.9 billion) through June this year. The rate was down 11.2 percentage points from the pace in the first five months, the National Bureau of Statistics said yesterday.
The profit figures cover state companies and private businesses in 39 industries with annual sales of more than 5 million yuan.
"The smaller profit growth was expected given the moderation in industrial production," said Li Maoyu, an analyst at Changjiang Securities Co. "With producer prices staying high and more restrictive policies to curb pollution, the growth rate may continue to fall the rest of this year."
China's industrial production grew 13.7 percent year on year in June, compared with a 16.2 percent rise in May. It was the third consecutive month that slower growth in industrial output was recorded.
The weaker expansion came after the country enhanced efforts to control energy-intensive industries.
The pace of industrial production may slow further this month as exports may be hurt by the end of some tax rebates.
Effective two weeks ago, tax rebates were dropped on 406 types of exports, including some steel and non-ferrous metal products, fertilizers, plastics, rubber and glass products.
But some analysts remained optimistic about the manufacturing sector, betting on the vast potential of domestic demand to boost the economy.
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