Profits at industrial companies slump 2.2%
By Ding Yining |
May 28, 2012, Monday
|
Print Edition
Print Edition
CHINA'S industrial companies' profits fell annually in April and in the first four months of this year, according to an official report yesterday.
Earnings at industrial companies nationwide fell 2.2 percent from a year ago to 208 billion yuan (US$32.8 billion) last month, the National Bureau of Statistics said.
That compares with an annual gain of 4.5 percent in March.
"The deceleration in profit growth signals the severe conditions facing domestic industry sectors and more incentive measures need to be introduced," said Yang Yu, a researcher with the Center for Urban Development under the National Development and Reform Commission.
Last year, profit climbed 25.4 percent.
"The steep drop suggests that demand is weakening and it is urgent that we stabilize the domestic economy," Yang said.
For the first four months, industrial profit was about 1.5 trillion yuan, down 1.6 percent from the same period in 2011, compared with a 1.3 percent drop in the first quarter.
A State Council meeting last Wednesday pledged to take measures to expand demand and create favorable policies to ensure stable and relatively fast economic growth.
"The downward pressure on the domestic economy is increasing," its statement said.
The country is also to launch a set of major projects to help boost a wide range of industries.
Of the 41 industry categories covered by the statistics bureau, 27 saw profit increase while 11 sectors reported lower earnings growth.
In the four months ended on April 30, China's private businesses recorded 425.7 billion yuan in profit, up 20.9 percent year on year.
State-owned or state-controlled businesses saw earnings drop 9.9 percent to 457.8 billion yuan over the same period.
Earnings of foreign invested and Hong Kong and Taiwan businesses dropped 13.2 percent annually in the first four months.
A preliminary 48.7 reading of HSBC's China purchasing managers' index last week indicated manufacturing may contract for a seventh month.
Market watchers have been calling for more easing policies in the face of what could be the longest run of below-50 PMI readings since 2008.
Earnings at industrial companies nationwide fell 2.2 percent from a year ago to 208 billion yuan (US$32.8 billion) last month, the National Bureau of Statistics said.
That compares with an annual gain of 4.5 percent in March.
"The deceleration in profit growth signals the severe conditions facing domestic industry sectors and more incentive measures need to be introduced," said Yang Yu, a researcher with the Center for Urban Development under the National Development and Reform Commission.
Last year, profit climbed 25.4 percent.
"The steep drop suggests that demand is weakening and it is urgent that we stabilize the domestic economy," Yang said.
For the first four months, industrial profit was about 1.5 trillion yuan, down 1.6 percent from the same period in 2011, compared with a 1.3 percent drop in the first quarter.
A State Council meeting last Wednesday pledged to take measures to expand demand and create favorable policies to ensure stable and relatively fast economic growth.
"The downward pressure on the domestic economy is increasing," its statement said.
The country is also to launch a set of major projects to help boost a wide range of industries.
Of the 41 industry categories covered by the statistics bureau, 27 saw profit increase while 11 sectors reported lower earnings growth.
In the four months ended on April 30, China's private businesses recorded 425.7 billion yuan in profit, up 20.9 percent year on year.
State-owned or state-controlled businesses saw earnings drop 9.9 percent to 457.8 billion yuan over the same period.
Earnings of foreign invested and Hong Kong and Taiwan businesses dropped 13.2 percent annually in the first four months.
A preliminary 48.7 reading of HSBC's China purchasing managers' index last week indicated manufacturing may contract for a seventh month.
Market watchers have been calling for more easing policies in the face of what could be the longest run of below-50 PMI readings since 2008.
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