Industrial profits 'pick up'

April's company earnings hit $70.48b: NBS

Growth of China's industrial profits picked up in April, but mainly due to a low comparative base, suggesting that lackluster demand is still a factor in the world's second-largest economy.

Industrial company profits rose 9.3 percent year-on-year to 437 billion yuan ($70.48 billion) in April after a 5.3 percent rise in March, the National Bureau of Statistics said on Monday.

The faster expansion was mainly due to more active production in industries such as electric power, automobiles and telecommunications, said an NBS statement.

During the first four months, total industrial profits were at 1.61 trillion yuan, up 11.4 percent year-on-year and slower than the 12.1 percent increase from January to March, the NBS said.

"The net income growth of industrial companies in April was stable," said Yu Jianxun, an economist with the NBS.

A reasonable growth in industrial profits may boost fixed-asset investment, which can lead to a steady rebound in economic expansion, economists said.

However, it's unlikely that the government will release aggressive stimulus packages to chase a "super-high" growth rate, they added.

According to the NBS, industrial output growth accelerated in April to 9.3 percent year-on-year, compared with 8.9 percent in March. The official Purchasing Managers' Index slowed to 50.6 from 50.9, because of a decline in new orders, suggesting a more moderate industrial activity in the coming months.

Zhu Haibin, chief economist in China at JPMorgan Chase & Co, said he expects modest economic growth this year. The downside risks may lower GDP growth to 7.6 percent this year compared with 7.8 percent in 2012, he said.