China's industrial profit growth speeds up

BEIJING - Profits of China's major industrial firms rose 6.9 percent year on year in the first seven months of 2016, accelerating from the 6.2-percent rise registered in the first half, official data showed Saturday.

Total profits of industrial companies with annual revenues of more than 20 million yuan ($3 million) reached 3.52 trillion yuan during the January-July period, the National Bureau of Statistics (NBS) said in a statement.

In July alone, their profits surged 11 percent to 523 billion yuan, the second highest monthly growth this year and much faster than the increase of 5.1 percent in June.

He Ping, an official with the NBS Department of Industrial Statistics, attributed the strong growth in July partly to dropping cost, commodity price rebounds and a relatively low comparison base.

Last month, the average cost of those companies was 86.08 yuan for each 100 yuan of main business revenue, down 0.42 yuan from July 2015, the data showed.

He added the prices of ferrous and non-ferrous metal products rebounded recently due to changing market conditions, resulting in profit surges in those sectors.

The ferrous metal making and processing sector saw a profit of 14.83 billion yuan in July, compared with a loss of 1.39 billion yuan in July 2015. Profit of the non-ferrous metal processing sector climbed by 6 billion yuan from a year ago.

The two sectors contributed to 47.5 percent of the total profit growth of industrial companies tracked by the NBS, according to He.

In July 2015, industrial profits dropped 2.9 percent year on year, providing a low base figure for last month's profit growth.

Among the 41 industries surveyed, 30 posted year-on-year profit growth during the first seven months, with the crude oil processing, ferrous metal processing and non-ferrous metal processing sectors recording the strongest profit growth.

Between January and July, profits of state-owned enterprises fell 6.1 percent, while profits of private companies rose 8.7 percent.

The main business revenue of industrial companies rose 3.3 percent in the first seven months, and their total assets rose 5.7 percent to 100.2 trillion yuan by the end of July, the NBS said.

"Although industrial profit growth accelerated, market demand did not witness substantial improvement," He said, adding that problems including rising management fees and overcapacity will hinder further profit improvement.