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China says industrial profits fell 10.6%

Written by AP Monday, 28 September 2009 17:08

BEIJING — Profits at China's oil producers, steel makers and other major industrial companies fell 10.6 percent in the first eight months of 2009 from the same period a year earlier, the National Bureau of Statistics said Sunday.

Total profits for the biggest Chinese industrial companies — those with annual revenues above 5 million yuan ($732,000) — were 1.67 trillion yuan ($245 billion) from January to August, data showed.

The data highlighted the impact of the global economic crisis on China's biggest companies, both private and state-owned, despite a multibillion-dollar government stimulus plan.

But it also marked an improvement from the last such survey in May, in which industrial profits fell 22.9 percent to 850 billion yuan ($124 billion) in the first five months of 2009 from the same period a year earlier.

Hardest hit were the iron and steel sector, where profits declined by 71.7 percent, and the petroleum and natural gas industries, which suffered a 68.5 percent drop in profits.

Profits in the power generation sector, however, increased by 194 percent. The report did not say why.

China's economic growth accelerated to 7.9 percent from a year earlier in the quarter ending June 30, up from 6.1 percent the previous quarter. The biggest improvements have been in state industry, while a private sector recovery has lagged.

Manufacturing and exports, mainstays of China's growth, have been battered by the downturn in global trade, but Beijing's 4 trillion yuan ($586 billion) stimulus program has helped to insulate the economy by fueling industrial demand through heavy spending on building new highways and other public works.

China's top economic official, Premier Wen Jiabao, has said the country's economic recovery is not stable yet and the government will continue its massive stimulus efforts despite recent improvements.

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