China's industrial profit growth accelerates

BEIJING - Major Chinese industrial firms saw their profits rise 13.5 percent year on year in the first three quarters, a faster pace than the 12.8-percent growth rate in the January-August period, the National Bureau of Statistics (NBS) said on Sunday.

From January to September, industrial firms with annual revenues of more than 20 million yuan ($3.26 million) reached total profits of 4.05 trillion yuan, the NBS said in a statement.

In September alone, profits of industrial companies surveyed grew 18.4 percent from a year ago to 558.89 billion yuan, down from the 24.2-percent growth seen in August but up from July's 11.6 percent, the NBS data showed.

He Ping, an analyst with the NBS, cited growing sales, rising manufacturer's price and falling unit costs as the main reasons behind steady growth in industrial profits.

Companies saw revenues from main business rise 11.9 percent year on year in September, up 1.6 percentage points from growth in August, while the manufacturer's price fell at a slower pace year on year and unit costs declined, He explained, citing the latest NBS data.

However, He said growth in the companies' investment returns had slackened, slowing down the growth rate of September's total profits from the previous month's level.

Investment returns of the companies surveyed edged up 9.5 percent year on year in September, down 20.1 percentage points from August, the NBS analyst said.

Among the 41 industries surveyed, 36 posted year-on-year profit growth in September, while five saw their profits decline.

The coal mining and washing industry ended a downward streak in profit growth in September, while the power and heat production and supply industry registered slower profit growth.

China's economic growth accelerated to 7.8 percent in the third quarter, up from 7.5 percent in the second quarter. Growth in the first nine months stood at 7.7 percent, in line with market expectations and above the government's full-year target of 7.5 percent.

But some analysts were concerned about softening growth momentum as indicated by slower growth in industrial output, fixed asset investment and retail sales.

However, British bank HSBC's preliminary purchasing managers' index (PMI) for October, the earliest reading of China's economic performance for this month, further pointed to recovery in the world's second-largest economy.

The bank's flash reading for the manufacturing PMI rose to 50.9 in October, the highest since April, compared with a final reading of 50.2 for September, the bank said in a report on Thursday.

Qu Hongbin, chief China economist with HSBC, said the momentum of consolidated growth is likely to continue in the coming months, creating favorable conditions for speeding up structural reforms.

The Chinese government is expected to plan comprehensive reforms during the Third Plenary Session of the 18th Communist Party of China Central Committee scheduled for November.