Industrial profits rise at fastest pace in 6 years

Profits at China’s major industrial companies rose in 2017 at the fastest pace in six years as supply-side structural reforms deepened, the National Bureau of Statistics said today.

Industrial companies’ profits rose 21 percent year-on-year to reach 7.52 trillion yuan (US$1.18 trillion).

The pace was the fastest since 2012, 12.5 percentage points faster than 2016.

Of the 41 industries surveyed, 37 posted year-on-year profit growth. The statistics bureau tracks companies with annual revenue of more than 20 million yuan.

Bureau statistician He Ping attributed the better earnings to deepening of supply-side reforms that effectively eliminated outdated capacity and lowered operation costs.

“New momentum gathered faster, and the pace of structural adjustment and upgrade accelerated,” He said. “The business environment of companies has significantly improved.”

He added that supply-side reforms should be strictly implemented to nurture new economy in the industrial sector and improve the quality of development.

NBS data showed that for each 100 yuan of revenue, companies had to spend 84.92 yuan, down 0.25 yuan from 2016.

By the end of December, the debt-asset ratio of the industrial companies dipped 0.6 percentage points from a year ago, to 55.5 percent.

Profit growth at advanced manufacturing companies reached 20.3 percent, the fastest among the manufacturing sector.

Profits at state-owned enterprises jumped 45.1 percent to 1.67 trillion yuan, and private companies reported profits growing 11.7 percent to 2.38 trillion yuan.

China’s economy expanded by a more-than-expected 6.9 percent last year, recovering from a 26-year low of 6.7 percent in 2016.

The Producer Price Index, tracking product prices of industrial companies, rose 6.5 percent year on year, the first annual increase since 2011.