Slowdown eases growth in industrial profit
Print Edition
CHINA’S industrial profits in the first two months of this year grew 9.4 percent from a year earlier, easing from last year’s 12.2 percent, further evidence of an economic slowdown, the National Bureau of Statistics said yesterday.
The profits totaled 779.3 billion yuan (US$125.4 billion) in the January-February period, with 29 industries out of the 41 being tracked reporting higher profits.
He Ping, a researcher at the bureau, said sluggish sales and rising production costs slowed the growth in profits.
He also said two industries together contributed 51.2 percent of the profits in the period. The automobile sector posted a 22.5 billion yuan rise in profits while the profits of power generation rose by 11.9 billion yuan.
Private businesses, meanwhile, grew their profits by 16.4 percent, the bureau said. The profits for foreign-invested companies and those from Hong Kong, Macau and Taiwan rose 14.5 percent. However, profits at state-owned enterprises dipped 0.2 percent, which dragged down the average growth rate.
Li Weisen, an economics professor at Fudan University, said: “If companies find it harder to make money, it means the economy is really slowing down.”
China’s economy performed weaker than expected at the start of this year, dimming hopes for a mild recovery in the world’s second-largest economy.
The HSBC Flash China Manufacturing Purchasing Managers’ Index, the earliest available indicator of China’s industrial sector’s vitality, fell to an eight-month low of 48.1 in March from February’s final reading of 48.5 — a consecutive month of contraction.
Gao Ting, managing director and chief China strategist at UBS, said: “China’s deceleration was worse than expected, and its first-quarter GDP rate may be below the target of 7.5 percent.”
JPMorgan cut the full-year growth outlook to 7.2 percent, which means China may miss the 7.5 percent target for the first time this century.
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