China's industrial profit decline

China-stock An investor takes pictures of an electronic screen showing stock information at a brokerage house in Fuyang, Anhui province, China | Reuters

Profits of China's major industrial firms fell 1.4 per cent year on year in November, narrowing from a 4.6 per cent decline posted in October, the National Bureau of Statistics (NBS) said on Sunday.

Profits at industrial companies with annual revenues of more than 20 million yuan ($3.1 million) totalled 672.1 billion yuan in November, Xinhua reported.

Rebounding sales, lower costs and higher investment returns helped slow the profit decrease, said He Ping, an official with the industry department at the NBS.

Revenues from the firms' primary business rose one per cent year on year in November, compared with a 1.4 per cent drop in October.

Automobile and electricity industries posted marked profit growth, a major contributor to improvement in the overall industrial profits.

Auto manufacturers saw their profits jumped 35 per cent in November, 28.6 percentage points higher than in October. Profits of power and heat suppliers soared 51 per cent, up 42.6 percentage points from October.

However, the country's industrial firms still have to cope with rapid piling up of finished products and fast increase of receivables, the money they have yet to collect from customers, He said.

Industrial profits in the first 11 months of this year dropped 1.9 per cent year on year to around 5.5 trillion yuan, the NBS said.

The decline narrowed from a two percent decrease registered in the January-October period.

In the first 11 months, state-owned industrial firms saw profits slump 23 per cent year on year, while privately-owned firms rose 5.3 per cent.

Facing lingering downward risks, Chinese authorities have ramped up efforts to prop up the economy.

The central bank has cut benchmark interest rates five times since last November and lowered banks' reserve requirement ratio three times since February.

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The Week

Topics : #China

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