China industrial profits fall for 6th straight month

[BEIJING] Profits earned by Chinese industrial companies in November fell 1.4 per cent from a year earlier, marking a sixth consecutive month of decline, data from the statistics bureau showed on Sunday.

Industrial profits - which cover large enterprises with annual revenue of more than 20 million yuan (S$4.3 million) from their main operations - fell 1.9 per cent in the first 11 months of the year compared with the same period a year earlier, the National Bureau of Statistics said on its website.

The November profits of industrial firms have seen some improvement from the previous month. In October, profits fell 4.6 per cent from a year earlier.

The NBS said investment returns for industrial companies in November increased from a year earlier by 9.25 billion yuan.

The jump in November profits from the auto manufacturing and electricity sectors, up 35 per cent and 51 per cent from a year earlier, respectively, helped narrow overall declines, the statistics bureau said.

Mining was still the laggard sector, with profits falling 56.5 per cent in the first 11 months of the year from a year earlier, the NBS data showed.

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 Co Ltd, said they would cut production by 15,000 tonnes of metal in December and reduce output next year by at least 20 percent from this year, in a bid to lift prices from their worst slump in over a decade.

The producer price index (PPI) contracted 5.9 per cent in November from a year earlier, recent data showed. PPI has been in negative territory for nearly four years, pointing to weak domestic demand and overcapacity.

China's top leader last week outlined main economic targets for next year after they held the annual Central Economic Work Conference, where it said the government will push forward"supply-side reform" to help generate new growth engines in the world's second-largest economy while tackling factory overcapacity and property inventories.

Chinese firms are combating high debt levels, and a growing number of companies have struggled to make bond payments on time this year. The heavy industry, construction and mining sectors remain under severe pressure from slowing demand and falling prices.

REUTERS