Profit declines narrow at China's industrial companies
Profits earned by Chinese industrial companies in November fell 1.4pc from a year earlier, marking a sixth consecutive month of decline, statistics bureau data showed yesterday.
Industrial profits - which cover large enterprises with annual revenue of more than 20 million yuan (€2.8m) from their main operations - fell 1.9pc in the first 11 months of the year compared with the same period a year earlier, according to the National Bureau of Statistics (NBS).
The November profits of industrial firms have seen some improvement from the previous month. In October, profits fell 4.6pc from a year earlier.
"The November industrial profit data matched earlier output data and they showed some signs of stablising, which are in line with recent data from other Asian countries," said Zhou Hao, China economist at Commerzbank in Singapore, adding the figures were slightly better than market expectations.
The NBS said investment returns for industrial companies in November increased from a year earlier by 9.25 billion yuan (€1.3bn).
The jump in November profits from the auto manufacturing and electricity sectors, up 35pc and 51pc from a year earlier, respectively, helped narrow overall declines, the statistics bureau said.
"Declines in industrial profits narrowed in November, but uncertainties still exist," said He Ping, an official of the Industry Department at NBS. He added that inventory of finished goods grew at a faster pace last month.
Profits of state-owned enterprises (SOEs) among major industrial firms saw a 23pc slump in the first 11 months this year from the same period in 2014. Mining remained the laggard sector, with profits falling 56.5pc in the same period.
Aluminium producer China Hongqiao Group said in early December it would cut annual capacity by 250,000 tonnes immediately to curb supplies.
Eight Chinese nickel producers including state-owned Jinchuan Group said they would cut production by 15,000 tonnes of metal in December and reduce output next year by at least 20pc from this year, in a bid to lift prices from their worst slump in over a decade.
China's producer prices have been in negative territory for nearly four years due to weak domestic demand and overcapacity.
At China's Central Economic Work Conference last week, the country's top leader outlined main economic targets for next year. (Reuters)