Money briefs: China's factories regain profit growth

Employees work on an instant noodles production line at a Tingyi factory in Zhengzhou, China, on Jan 7, 2016.
Employees work on an instant noodles production line at a Tingyi factory in Zhengzhou, China, on Jan 7, 2016. PHOTO: REUTERS

China's factories regain profit growth

China's industrial profits returned to growth in the first two months of this year, despite weakening business conditions and slowing growth in the world's No. 2 economy.

Profits earned by industrial firms in January and February rose 4.8 per cent from a year ago, totalling 780.7 billion yuan (S$164 billion) in the two-month period, the National Bureau of Statistics (NBS) said yesterday.

That compared with an annual fall of 4.7 per cent in December, which was the seventh straight month of decline. The positive trend was driven in part by quicker product sales of industrial firms and a narrowing in the decline of industrial producer prices, said NBS official He Ping in a statement.

The oil processing, electrical machinery and food sectors contributed significantly to growth in profits, the statement said, noting that the sectors benefited from lower oil prices.

Growth in the food industry was driven by strong demand as well as a decline in prices for some raw materials, the statement added.

The bureau always gives a combined profit figure for the first two months of each year to smooth out seasonal distortions caused by the Chinese New Year holiday, when most companies are closed for the long celebrations.

REUTERS


Abe 'to unveil new stimulus measures'

Japanese Prime Minister Shinzo Abe plans to announce a package of new spending measures tomorrow to boost the economy, the Nikkei newspaper reported, without saying where it obtained the information.

Mr Abe will probably give details of the measures at a press conference on the same day that Japan's 96.7 trillion yen (S$1.2 trillion) budget for fiscal 2016 is expected to become law, the newspaper reported.

The new measures may include shopping vouchers, an increase in pay for nursery school teachers and public works projects, according to the newspaper.

Japan's economy contracted in two of the past three quarters, and sentiment among consumers, merchants and businesses has slumped.

Mr Abe may announce this week that he plans to front-load spending measures under the nation's regular budget, allowing the government to finance more projects this year, Nikkei reported.

The Japanese government will probably decide on the size of the stimulus measures and whether to proceed with a planned sales tax increase after seeing figures for first-quarter gross domestic product growth to be released on May 18, the newspaper said.

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A version of this article appeared in the print edition of The Straits Times on March 28, 2016, with the headline 'Money briefs: China's factories regain profit growth'. Print Edition | Subscribe