Industrial profits surge 82%
By Wang Yanlin |
June 26, 2010, Saturday
|
Print Edition
Print Edition
PROFITS at China's industrial companies soared 81.6 percent from a year earlier in the first five months of 2010 to notch a record high for the same period in the past decade, the National Bureau of Statistics said yesterday.
Robust sales and a low comparative base contributed to the profit increase, the bureau said, while an analyst projected the growth to moderate with a slower pace of manufacturing output.
Chinese manufacturers posted 1.54 trillion yuan (US$226.1 billion) in net earnings through May. Profits in the first four months surged 91.5 percent from a year earlier and jumped 102.6 percent in the first quarter. Sales jumped 38 percent annually over the five-month period from a year earlier.
"China's industrial production has moderated in growth to prevent overheating," said Li Maoyu, an analyst at Changjiang Securities Co. "With the outlook for exports turning murky, it is likely that output in China's manufacturing sector will ease further and result in lower profits."
China's industrial production grew 16.5 percent from a year earlier in May, down 1.3 percentage points from that in April.
The bureau said state-owned enterprises led the increase in profit as their earnings more than doubled to 524.3 billion yuan from January through May.
Profits at foreign-invested companies and those from Hong Kong, Macau and Taiwan climbed 83.6 percent to 451.8 billion yuan.
China will scrap tax rebates for 406 types of exports, including some steel and nonferrous metal products, fertilizers, plastic, rubber and glass products, from July 15.
The Ministry of Commerce said the scrapping was to discourage exports of energy-intensive products and to help industries move up the global manufacturing value chain. But the ministry was confident China's exports would not plunge and that the measure did not point to a change in the country's export policy.
However, analysts were more sceptical and said the removal of the tax rebates would result in losses for some steel mills and metal producers and deal a severe blow to China's manufacturing sector.
Robust sales and a low comparative base contributed to the profit increase, the bureau said, while an analyst projected the growth to moderate with a slower pace of manufacturing output.
Chinese manufacturers posted 1.54 trillion yuan (US$226.1 billion) in net earnings through May. Profits in the first four months surged 91.5 percent from a year earlier and jumped 102.6 percent in the first quarter. Sales jumped 38 percent annually over the five-month period from a year earlier.
"China's industrial production has moderated in growth to prevent overheating," said Li Maoyu, an analyst at Changjiang Securities Co. "With the outlook for exports turning murky, it is likely that output in China's manufacturing sector will ease further and result in lower profits."
China's industrial production grew 16.5 percent from a year earlier in May, down 1.3 percentage points from that in April.
The bureau said state-owned enterprises led the increase in profit as their earnings more than doubled to 524.3 billion yuan from January through May.
Profits at foreign-invested companies and those from Hong Kong, Macau and Taiwan climbed 83.6 percent to 451.8 billion yuan.
China will scrap tax rebates for 406 types of exports, including some steel and nonferrous metal products, fertilizers, plastic, rubber and glass products, from July 15.
The Ministry of Commerce said the scrapping was to discourage exports of energy-intensive products and to help industries move up the global manufacturing value chain. But the ministry was confident China's exports would not plunge and that the measure did not point to a change in the country's export policy.
However, analysts were more sceptical and said the removal of the tax rebates would result in losses for some steel mills and metal producers and deal a severe blow to China's manufacturing sector.
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