Profit rallies but seen interim
By Wang Yanlin |
July 28, 2011, Thursday
|
Print Edition
Print Edition
CHINA'S industrial companies saw their profit rebound in June as production accelerated but analysts warned that the growth may be temporary because the outlook for manufacturers remained gloomy.
Their net earnings increased 28.7 percent from a year earlier to 2.41 trillion yuan (US$374 billion) in the first six months, up from 27.9 percent between January and May, the National Bureau of Statistics said yesterday.
Though unexpected, the profit increase was in line with the 15.1 percent annual growth in industrial production in June, against 13.3 percent a month earlier. But the rise ended a streak of moderating profit growth that started from the beginning of this year.
"The profit rebound is due to an easing from the impact of the Japanese earthquake and solid investment in the domestic market," said Li Maoyu, an analyst at Changjiang Securities Co. "But negative factors in both internal and external markets mean that the rebound may be short-lived for Chinese manufacturers."
Tightening policies that have been introduced will continue to remain as policymakers vowed to combat inflation as their top priority. The People's Bank of China, the central bank, has raised interest rates three times so far this year and boosted reserve requirement ratio six times.
Also the debt crisis in Europe seems to be hardly abating, thereby threatening demand in China's largest trading partner.
Meanwhile the HSBC Flash Purchasing Managers' Index, the earliest available indicator of the industrial sector's operating conditions, hit a 28-month low of 48.9 in July. It was the first time in a year that the index pointed to shrinking manufacturing activities nationwide.
Their net earnings increased 28.7 percent from a year earlier to 2.41 trillion yuan (US$374 billion) in the first six months, up from 27.9 percent between January and May, the National Bureau of Statistics said yesterday.
Though unexpected, the profit increase was in line with the 15.1 percent annual growth in industrial production in June, against 13.3 percent a month earlier. But the rise ended a streak of moderating profit growth that started from the beginning of this year.
"The profit rebound is due to an easing from the impact of the Japanese earthquake and solid investment in the domestic market," said Li Maoyu, an analyst at Changjiang Securities Co. "But negative factors in both internal and external markets mean that the rebound may be short-lived for Chinese manufacturers."
Tightening policies that have been introduced will continue to remain as policymakers vowed to combat inflation as their top priority. The People's Bank of China, the central bank, has raised interest rates three times so far this year and boosted reserve requirement ratio six times.
Also the debt crisis in Europe seems to be hardly abating, thereby threatening demand in China's largest trading partner.
Meanwhile the HSBC Flash Purchasing Managers' Index, the earliest available indicator of the industrial sector's operating conditions, hit a 28-month low of 48.9 in July. It was the first time in a year that the index pointed to shrinking manufacturing activities nationwide.
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