China: Industrial business profits show increase
July 27, 2014, 4:34 am

June statistics showed that industrial firms registered some 588 billion yuan ($94 billion) in profits, up by 17.9 per cent year on year [Getty Images]

Profits from January to May had been up less than 10 per cent compared to the same period last year.

But June statistics showed that industrial firms registered some 588 billion yuan ($94 billion) in profits, up by 17.9 per cent year on yea

According to NBS, overall profits of industrial companies which have an annual business revenue of more than 20 million yuan ($3.2 million) reached 2.86 trillion yuan ($462 billion) in the first six months of 2014 – an 11.4 per cent rise compared to the same period last year.

The NBS figures come on the heel of other positive data in June which showed that monthly fixed asset investment and industrial production growing 17.9 per cent and 9.2 per cent, respectively.

The encouraging data prompted HSBC to upgrade its forecast for China’s year-on-year gross domestic product (GDP) growth to 7.5 per cent from 7.4 per cent.

HSBC said in its report that China’s economic recovery has been stronger than expected but has advised continued reforms to curb shadow bank lending.

China’s GDP growth in the second quarter “surprised on the upside relative to our forecast” owing to stronger-than-expected government support measures, HSBC Chief China Economist Qu Hongbin said in a report last week.

Meanwhile, China’s services sector edged down half a point as China’s non-manufacturing purchasing managers’ index (PMI) dropped to 55 points in June from a six-month high of 55.5 in May, data in early July showed.

A PMI reading above 50 indicates expansion, while a reading below 50 reflects contraction.

The non-manufacturing PMI, compiled by the National Bureau of Statistics and the China Federation of Logistics and Purchasing (CFLP), tracks activity in sectors including construction, software, aviation, railway transport and real estate.

In spite of the slight drop, non-manufacturing activity was still at a relatively high level, as the index was still five points above the boom-bust line of 50, said the CFLP’s deputy chief Cai Jin.

Source: Agencies