BEIJING: China’s manufacturing companies saw profits grow faster in the first quarter — proof that the Chinese economy is stabilizing, data from the National Bureau of Statistics showed yesterday.
Net earnings grew 7.4 percent from a year earlier to 1.34 trillion yuan (US$206 billion) in the first three months. The pace accelerated from the 4.8 percent rise in the first two months. In March, manufacturers reported a profit of 561.2 billion yuan, up 11.1 percent year on year.
He Ping, a researcher at the bureau, said the recovery was driven by fast growing sales, a milder drop in factory product prices, lower costs and higher profits from investments and non-operating revenue.
“Revenues of industrial companies expanded 4.6 percent in March, the fastest monthly pace in three years, while a narrowing drop in producer prices also contributed significantly to profit growth,” He said.
But part of the profit growth was due to a low comparative base and increased investment income that may not be sustainable, He noted.
In March, investment income surged 20.4 percent from a year earlier, reversing a 3 percent drop in the first two months, while non-operating income surged 68.3 percent year on year. Profits from investments and non-operating revenue took up 30.5 percent of the growth in industrial profit last month.
“The industrial sector is still facing headwinds of insufficient demand, inventory pressure and financial difficulties. It remains to be seen if the profit growth can be sustained,” He said.
Profits of state-owned manufacturers fell 5.7 percent year on year to 235.8 billion yuan in the first three months. Private companies’ profit grew 7.7 percent to 485 billion yuan and companies from Hong Kong, Macau and Taiwan saw a 8.9 percent rise in profits from a year earlier to 344.2 billion yuan.
Of the 41 industries being tracked, profits at 31 grew in the January-March period, led by IT equipment companies and chemical firm, while 10 industries saw a contraction, with coal miners’ profits slumping 92.6 percent.
