China's industrial profit growth slows

Profits at China's major industrial companies rose in November at the slowest pace in seven months on cooler prices, the National Bureau of Statistics announced yesterday.

Profits at China’s major industrial companies rose in November at the slowest pace in seven months on cooler prices, the National Bureau of Statistics announced yesterday.

Industrial companies’ profits totaled 785.82 billion yuan (US$119.86 billion) last month, up 14.9 percent year on year but that was a drop from 25.1 percent in October.

For the first 11 months combined, industrial profits rose 21.9 percent year on year to 6.88 trillion yuan.

Of the 41 industries surveyed, 39 posted year-on-year profit growth from January to November. The statistics bureau tracks companies with annual revenue of more than 20 million yuan.

Bureau statistician He Ping attributed the slower profit growth to cooler inflation at the factory gate.

The Producer Price Index, tracking product prices of industrial companies, rose 5.8 percent year on year in November, the lowest in four months.

He said the price factor dragged the industrial profit growth by 13.8 percentage points. The slower price increase also hurt companies’ cost as some materials were purchased by them at higher prices previously, He added.

For each 100 yuan of revenue, companies had to spend 85.52 yuan, up 0.29 yuan from the same month of last year, according to the latest bureau figures.

By the end of November, the debt-asset ratio of the industrial companies dipped 0.5 percentage points from a year ago to 55.8 percent.

Profits at coal, steel, chemicals, and petroleum sectors contributed to over half of the total profit at industrial companies.

Profit growth at advanced manufacturing and strategic new industries outpaced the average, bureau data showed.

Profits at state-owned enterprises jumped 46.2 percent to 1.58 trillion yuan in January to November, compared with a 48.7 percent surge in the first 10 months.

Private companies reported profits growing 12.7 percent to 2.19 trillion yuan in the first 11 months, down from 14.2 percent in the first 10 months.

November’s manufacturing Purchasing Managers’ Index stood at 51.8, above the boom-bust mark for the 16th month in a row.

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