Industrial prof­its up

Ini­tial sig­nals of sta­bi­liza­tion are ap­par­ent, an­a­lysts say; key in­dex shows pos­i­tive signs

China Daily (USA) - - CHINA - By XIN ZHIMING xinzhim­ing@chi­

China’s industrial profit growth came in at 9.8 per­cent year-on-year in Oc­to­ber, up from 7.7 per­cent the pre­vi­ous month, a pos­i­tive sign for the coun­try’s eco­nomic re­struc­tur­ing and macroe­co­nomic sta­bi­liza­tion.

The ac­cel­er­ated profit growth was at­trib­ut­able to the growth of sales rev­enues, ris­ing pro­ducer prices and strong profit growth in the chem­i­cal, coal and gen­eral equip­ment sec­tors, theNa­tional Bureau of Statis­tics said in a state­ment.

China’s pro­ducer price in­dex, which mea­sures fac­tory gate prices and in­di­cates a level of eco­nomic ac­tiv­ity, rose 1.2 per­cent year-on-year in Oc­to­ber, up from 0.1 per­cent in Septem­ber, show­ing im­prove­ment in do­mes­tic de­mand for industrial prod­ucts, saidNBSof­fi­cial He Ping in an ar­ti­cle pub­lished on the min­istry’s web­site.

The ris­ing industrial profit level in Oc­to­ber is a sign of im­prov­ing bal­ance sheets of en­ter­prises, He said, not­ing that profit ra­tios of industrial en­ter­prises rose and their costs dropped.

He said China’s sup­ply-side struc­tural re­forms have made solid ad­vance­ment as in­di­cated by the Oc­to­ber read­ing of industrial prof­its. The stock, He Ping, lever­age ra­tio and cost level of en­ter­prises all dropped in Oc­to­ber, he said.

In the first 10 months, to­tal industrial prof­its ex­panded 8.6 per­cent year-on-year, faster than the 8.4 per­cent rise in the first three NBS said.

Prof­its in the coal min­ing sec­tor rose 112.9 per­cent from Jan­uary to Oc­to­ber year-onyear, while man­u­fac­tur­ing prof­its rose 13.2 per­cent.

“Al­though Oc­to­ber’s industrial profit growth picked up, the struc­ture of growth has yet to im­prove,” He said.

“Prof­its in tra­di­tional raw ma­te­ri­al­spro­duc­tion in­creased rel­a­tively quickly,” he said, adding that the profit growth in high tech­nol­ogy and equip­ment man­u­fac­tur­ing slowed.

Ac­cord­ing to Jiang Chao, chief macro­eco­nomics an­a­lyst at Haitong Se­cu­ri­ties, “al­though industrial profit growth picked up in Oc­to­ber, it is still lower than the level in July and Au­gust. The up­stream in­dus­tries, such as min­ing, saw im­prove­ment in prof­its, but the down­stream sec­tors suf­fered.”

China’s econ­omy has shown ini­tial signs of sta­bi­liza­tion, an­a­lysts said. For ex­am­ple, the man­u­fac­tur­ing pur­chas­ing man­agers’ in­dex, a key mea­sure of eco­nomic vi­tal­ity, rose to 51.2 in Oc­to­ber, up 0.8 from the pre­vi­ous month.

Boosted by im­prov­ing cor­po­rate profit sit­u­a­tions and a sta­bi­liz­ing job mar­ket, China can meet its pre­setGDP­growthtar­get of at least 6.5 per­cent yearon-year for this year, ac­cord­ing to Zhu Bao­liang, head of the eco­nomic fore­cast­ing de­part­ment of the State In­for­ma­tion Cen­ter. quar­ters, the

Al­though Oc­to­ber’s industrial profit growth picked up, the struc­ture of growth has yet to im­prove.” of­fi­cial at the Na­tional Bureau of Statis­tics

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