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China’s industrial profit gains momentum with economy humming: Economic
Watch
BEIJING, July 27, 2018 (BSS/Xinhua) – Profit growth of China’s major
industrial firms picked up in the first half (H1) of 2018, adding to bullish
signs of an economy set to meet high-quality development goals.
Profits at the industrial firms grew 17.2 percent in the Jan.-June period,
quickening from the 16.5-percent expansion for the Jan.-May period, data from
the National Bureau of Statistics (NBS) showed Friday.
In June alone, combined profits at industrial companies with annual
revenue of more than 20 million yuan (about 2.95 million U.S. dollars) went
up 20 percent year on year, slightly retreating from the 21.1-percent gain in
May.
NBS statistician He Ping attributed the sound growth to the country’s
supply-side structural reforms, which helped reduce production costs and
lower debt levels.
In the first half year, costs per 100 yuan of revenue from the companies
dropped 0.37 yuan from the same period last year to 84.42 yuan, according to
He.
The debt-asset ratios of major industrial firms dropped 0.4 percentage
points year-on-year to 56.6 percent by the end of June.
These firms also posted stronger profit earning capabilities and saw
faster inventory turnover of their products.
Among the 41 industries surveyed, 29 posted year-on-year profit growth
during this period, with the petroleum and natural gas mining, ferrous metal
metallurgy and rolling, and chemical sectors as major profit contributors.
Despite mounting external uncertainties, Friday’s data was the latest in a
slew of economic barometers that point to resilience in China’s broad economy
which has won positive ratings from observers.
NBS data released earlier this month showed China’s GDP expanded 6.8
percent year on year in H1, up from the annual target of around 6.5 percent
and within the range of 6.7 to 6.9 percent for 12 consecutive quarters.
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Other economic indicators, including private investment, manufacturing
investment, and resident income all picked up in H1, pointing to a stable
real economy and progress in structural transformation.
Commenting on China’s economic performance in the second quarter, chief
economist of ICBC International Cheng Shi said the steady growth reflected
the effectiveness of deepening supply-side structural reform.
“The reform has galvanized the inherent dynamics of China’s economy, which
will serve as useful cushions to adverse external impact,” Cheng said.
“With steady improvement in economic structure and production efficiency,
China is breaking new ground for economic development and laying solid
foundations for high-quality development in the second half of this year,”
Cheng noted.
The International Monetary Fund (IMF) has maintained its forecast for
China’s economic growth this year at 6.6 percent. “The Chinese economy
continues to perform strongly,” it said in a press release Wednesday.
China’s growth outlook remains strong and offers an opportunity to
accelerate re-balancing and other reform efforts, the IMF said.
“Reforms progressed in several key areas. A wide range of regulatory
reforms reduced financial sector risks, overcapacity reduction progressed,
anti-pollution efforts intensified and opening-up accelerated recently,” the
IMF noted.
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