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在线翻译:
szdaily -> Business
Industrial profits increase most in four years
    2017-September-28  08:53    Shenzhen Daily

PROFITS rose for China’s industrial companies by the biggest margin in four years in August as commodities prices surged, thanks to a government-backed construction boom that is helping the government trim high levels of corporate debt without tripping up the economy.

The upbeat earnings report is another sweetener for authorities as China focuses on stripping out financial risks from years of credit-fueled growth and keeping the economy on steady footing.

Profits in August jumped 24 percent year on year to 672 billion yuan (US$101.21 billion), the National Bureau of Statistics (NBS) said yesterday.

Discounting the combined January-February profit rise of 31.5 percent, the latest earnings boost would be the biggest single monthly percentage surge since August 2013. The statistics bureau does not release single-month figures for January and February due to seasonal factors.

Annual profit growth was 16.5 percent in July.

“The figures are really positive — they show China’s efforts to cut down on overcapacity are working well,” said Iris Pang, China Economist at ING bank in Hong Kong.

Crucially, Pang said that the government is also making headway in reducing debt risks. “When you close down overcapacity factories, you are also deleveraging to an extent.”

The robust industrial earnings growth in August was driven by higher prices, particularly in sectors such as oil, steel and electronics, He Ping of the National Bureau of Statistics said in a statement.

He estimated that surging prices contributed to nearly one-third of the new profits last month.

A year-long, government-led construction boom has fueled demand and prices for building materials, while China’s push to cut excess capacity in heavy industries and its war on pollution has also appeared to intensify a short-term supply shortage and higher prices.

For the first eight months this year, the firms notched up profits of 4.92 trillion yuan, an increase of 21.6 percent year on year, picking up slightly from the 21.2 percent annual growth in the January-July period.

The earnings data by sector, however, highlights the uneven nature of profit growth.

Earnings in the mining industry soared 5.9 times from a year earlier, coal mining enjoyed a 960 percent jump and manufacturing saw an 18.6 percent boost. Sectors such as electricity, gas and water production, however, saw their profits plunge 22.6 percent.

A private survey of thousands of Chinese firms by China Beige Book International (CBB) noted major risks are looming for 2018, with a reversal in the commodity boom being one of the top worries.

“It was demand and hot money inflows that kept prices rising. Neither was sustainable and now demand has clearly sputtered,” it said.

Profits at China’s State-owned industrial firms were up 46.3 percent at 1.08 trillion yuan in the January-August period, compared with a 44.2 percent rise in the first seven months. But earnings for all State firms for August alone were only up 4.3 percent year on year, Reuters calculations show.

Chinese industrial firms’ liabilities at the end of August were 6.4 percent higher than at the same point last year.

Still, after a robust first-half growth it is expected to easily meet the government’s 6.5 percent target for this year.

“We are bullish on China’s growth,” ING’s Pang said.

“It’s not just capacity cuts that are boosting prices. Demand is quite strong too.”(SD-Agencies)

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