China in­dus­trial firms' Jan-Feb prof­its re­turn to growth

The Pak Banker - - 6BUSINESS -

BEI­JING: China's in­dus­trial prof­its re­turned to growth in the first two months of 2016, de­spite weak­en­ing busi­ness con­di­tions and slow­ing eco­nomic growth in the world's sec­ond-largest econ­omy. Prof­its earned by Chi­nese in­dus­trial firms in Jan­uary and Fe­bru­ary com­bined rose 4.8 per­cent from a year ear­lier, to­tal­ing 780.7 bil­lion yuan ($119.8 bil­lion) in the two-month pe­riod, the Na­tional Bureau of Sta­tis­tics (NBS) said on Sun­day.

That com­pared with an an­nual fall of 4.7 per­cent in De­cem­ber 2015, which was the sev­enth straight month of de­cline. The pos­i­tive trend was driven in part by quicker prod­uct sales of in­dus­trial firms and a nar­row­ing in the de­cline of in­dus­trial pro­ducer prices, said He Ping, an NBS of­fi­cial, in a state­ment ac­com­pa­ny­ing the data.

The oil pro­cess­ing, elec­tri­cal ma­chin­ery and food sec­tors con­trib­uted sig­nif­i­cantly to growth in prof­its, He added, say­ing the sec­tors ben­e­fit­ted from lower oil prices.

Growth in the food in­dus­try was driven by strong de­mand as well as a de­cline in prices for some raw ma­te­ri­als, the state­ment added. The bureau al­ways gives a com­bined profit fig­ure for the first two months of each year to smooth out sea­sonal dis­tor­tions caused by the Lu­nar New Year holiday, when most com­pa­nies are closed for the long cel­e­bra­tions.

China's pro­ducer prices fell for the 48th month in a row in Fe­bru­ary though their pace of de­cline eased, high­light­ing the deeply en­trenched pres­sures fac­ing its man­u­fac­tur­ers. China's Premier Li Ke­qiang said on Thurs­day that the coun­try has enough pol­icy tools to keep the econ­omy sta­ble de­spite "deep rooted" struc­tural prob­lems and down­ward pres­sure. Chi­nese lead­ers have set a growth tar­get of 6.5 per­cent to 7 per­cent for this year, in­tro­duc­ing a band rather than a hard tar­get as it seeks greater flex­i­bil­ity in jug­gling growth, job cre­ation and re­struc­tur­ing of a host of "zom­bie com­pa­nies" in bloated in­dus­tries.

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