Beijing: China’s industrial firms weathered a broad government crackdown on financial risks as profits continued to surge last month in a stabilising force for the world’s second-biggest economy, which has started to cool slightly in recent months.
The vast industrial sector has been boosted by a year-long, government-led construction spree, helping lift demand and prices for building materials and taking the edge off higher borrowing costs.
Indeed, mining and heavy industry contributed the biggest gains in October, propelling overall industrial profits by 25.1 per cent year-on-year to 745.4 billion yuan ($112.94 billion), compared with a 27.7 per cent jump in September, the National Bureau of Statistics (NBS) said on Monday.
Despite the modest slowdown, October’s growth rate was still the second-highest for a single month this year, and overall profits are on pace to easily top 2016’s record 6.88 trillion yuan.
“Apart from very high growth of the coal sector, we have very decent growth in other sectors as well,” said Iris Pang, greater China economist at ING in Hong Kong.
“I think this growth will be sustainable, even though...we will have high base effect in coal and steel next year.”
The data covers large companies with annual revenue exceeding 20 million yuan from their main businesses.
PRICE IMPACT: More than half of the increase in profits in October came from mining, iron and steel smelting and processing, chemicals, and oil and natural gas extraction, He Ping of the statistics bureau said in an accompanying statement.
The closure of polluting plants and factories have fuelled fears of supply shortages in the winter, lifting prices of finished goods including steel and copper products. — Reuters
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