MONDAY, MAY 26, 2003
China's industrial profit growth slows
REUTERS
BEIJING: China said on Monday its industrial profits rose 75.7 per cent in the first four months of 2003 from a year earlier, slowing from a 94.3 per cent surge in the first quarter, the latest sign the economy is losing steam.
Combined profits of industrial firms were 225.6 billion yuan ($27.3 billion) between January and April, the State Statistical Bureau said in a statement. It did not give figures for April.
Among the most profitable sectors, earnings of crude oil and natural gas producers rose by 28.9 billion yuan between January to April from a year earlier, while those of the transport sector, including cars, rose by 15 billion yuan, it said.
The sectors, which also included makers of chemical raw materials and oil products, accounted for 66 per cent of the increased profits of the whole industrial sector, it said.
China's industrial profits grew 20.6 per cent in 2002.
Analysts say the profit growth is underpinned by China's economic growth, which slowed to 8.9 per cent in April from the robust 9.9 per cent in the first quarter and is expected to slow further due to the fallout from the SARS outbreak.
State-owned industrial enterprises made profits of 121.7 billion yuan in the first four months of this year, up 120 per cent from a year earlier, the bureau said. The growth slowed from a 160 per cent jump in the first quarter.
Analysts say state sector profits are underpinned by big monopolies which still benefit from state protection, while many smaller state firms are teetering on the verge of bankruptcy.
The government claimed victory in pulling the state sector out of the red in 2000, but conceded later only 30 per cent of the improved profitability was from greater efficiency. The rest came from state support and overall economic growth.
($1=8.277 Yuan)
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