China March industrial profits soar 23.8% on property but off highs

Chinese employees working on an energy-saving bulb production line at a lighting factory in Suining, south-west China's Sichuan province, on Feb 28, 2017.
Chinese employees working on an energy-saving bulb production line at a lighting factory in Suining, south-west China's Sichuan province, on Feb 28, 2017. PHOTO: AFP

BEIJING (REUTERS) - Profits earned by China's industrial firms rose 23.8 per cent in March from a year earlier, buoyed by a continued boom in the real estate sector, though the growth was off multi-year highs seen in previous months.

Profits in March rose to 688.7 billion yuan (S$139.27 billion), the National Bureau of Statistics (NBS) said on its website on Thursday (April 27).

In the first quarter, industrial profits climbed 28.3 per cent to 1.7 trillion yuan, slowing from growth of 31.5 percent in the first two months.

A construction boom in China has helped spur sales and prices of building materials, reviving profits for long-ailing "smokestack" industries such as steel mills and smelters.

But some analysts say producer price inflation is peaking, which could temper profitability and new investment later this year.

Strong first-quarter profits, together with an increase of 14.1 per cent in fiscal revenue, have set "an excellent foundation" for improved growth quality in 2017, Ning Jizhe, vice chairman at the National Development and Reform Commission (NDRC), told the People's Daily in an interview on Wednesday.

China's government has lowered its economic growth target to around 6.5 per cent this year from a range of 6.5-7 per cent last year and an actual rate of 6.7 per cent. First-quarter gross domestic product grew 6.9 per cent.

Policymakers in China are pushing a bullish message on the world's second-biggest economy, pointing to a slowdown in capital outflows and a stable yuan after a selloff last year stoked fears of instability.

Ning told the state-run newspaper that market watchers should not be too sensitive to minor fluctuations in the economic growth rate and should pay more attention to the quality of growth instead.

Earlier this month, the International Monetary Fund raised its 2017 growth projection for the Chinese economy, to 6.6 per cent from 6.5 per cent.

Chinese industrial firms' liabilities rose 6.6 percent from a year earlier as of end-March, unchanged from an increase of 6.6 per cent in the first two months of 2017.

The profits data covers large enterprises with annual revenues of more than 20 million yuan from their main operations.

Data from the Ministry of Finance released on Wednesday showed profits at China's state-owned firms rose 37.3 per cent in the first three months of 2017 from a year earlier.