Profit growth slows in major industries

Updated 2017-08-28 08:30:51 China Daily
A technician operates a high-tech production line in Xuanhua, Hebei province. (Chen Xiaodong/for China Daily)

A technician operates a high-tech production line in Xuanhua, Hebei province. (Chen Xiaodong/for China Daily)

Supply-side structural reforms working, official says; debt levels down slightly

China's major industries registered slower profit growth in July, but a senior official at the National Bureau of Statistics said on Sunday that overall data show the country's supply-side structural reform has continued to make progress.

Profits of the country's major industrial companies last month rose by 16.5 percent from a year earlier, the bureau said on Sunday. The figure was 2.6 percentage points lower than in June, but still significantly on the plus side.

In the first seven months as a whole, profits of major industrial enterprises rose 21.2 percent year-on-year, compared with 22 percent in the first half of this year, the bureau said.

The data cover companies with annual revenues of more than 20 million yuan from their primary operations.

The cooling of profit growth was mainly the result of seasonal factors, such as extreme weather conditions, the bureau said on its website.

"Short-term noneconomic factors, such as vacations and disrupted production caused by extreme high temperatures, have led to slower growth of profits," it said.

The figure should not be interpreted as a sign of a weakening of the Chinese economy since, apart from extreme weather, it is mainly related to the relatively high base figures of last year, according to a research note by CITIC Securities. China's economic fundamentals remain solid, and both its domestic and external demands are rising, which will bolster growth in the coming months, it said.

The manufacturing sector, which accounts for 88 percent of industrial profits, saw profit growth of 18.1 percent in the first seven months, slightly down from 18.5 percent in the first half. But mining industries registered profits that were 7.9 times those of a year ago because of price increases in recent months.

Major State-owned industrial enterprises recorded profit growth of 44.2 percent in the first seven months, while that of private companies was 14.2 percent, the bureau said.

On the whole, as the supply-side structural reform continues, overall corporate earnings are improving, the statement said.

China has made efforts to push forward its supply-side structural reform to shrink excessive production capacity, cut corporate debt and reduce costs for enterprises, among other things.

He Ping, a senior official at the NBS, said the July data show that China has continued to make headway in those areas. In July, for example, the asset-to-liability ratio of major industrial enterprises, which reflects debt levels, was 55.8 percent, down by 0.7 percentage points year-on-year, He said, adding that the profit-to-revenue ratio of those enterprises' core businesses was 5.97 percent, 0.33 percentage points higher than a year ago.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58October 18 2017 00:59:52

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16October 18 2017 00:59:52

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18October 18 2017 00:59:52

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

News:
China World Business Sports Showbiz Audio
Video:
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
Photos:
China World Fun Travel Entertainment Sports
Travel:
Beijing Shanghai Guangzhou
Lifestyle:
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords