Chinese industrial profits snapped a seven-month losing streak in the first weeks of this year, while the data also showed companies fell deeper in debt while inventories grew.
Industrial companies’ profits climbed 4.8 percent from a year earlier to 780.7 billion yuan (US$120 billion) in January to last month, the National Bureau of Statistics said in a statement yesterday.
Oil processing, electrical machinery and food companies led gains as 28 of 41 industry groups posted profits, the bureau said.
Profits fell 2.3 percent last year.
“Industrial sectors still face many difficulties,” bureau officials said in an explanatory statement. “First, there’s a sharp decline in profits for mining and raw materials. Second, inventory pressures remain quite large.”
Profits also benefited from a low-base effect compared with the same period last year, they said.
Top Chinese officials at the National People’s Congress in Beijing this month renewed their pledges to continue overhauling inefficient state-run businesses, with Chinese Premier Li Keqiang (李克強) vowing in his annual news conference that reforms would not spur mass layoffs and do not imperil the government’s plan to keep economic growth above 6.5 percent this year.
Debt at Chinese companies increased 5.5 percent during the period to 54 trillion yuan, the bureau said.
Businesses had 16.5 days worth of finished goods inventory at the end of last month, 2.3 days more than the end of December last year.
Industrial profits fell 4.7 percent in December last year from a year earlier, a seventh straight drop. Profits tumbled 8.8 percent in August last year, the most in at least four years.
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