China's Industrial Enterprises Earn Record High Profits in April Due to Strong Demand
Xu Wei
DATE:  May 28 2018
/ SOURCE:  Yicai
China's Industrial Enterprises Earn Record High Profits in April Due to Strong Demand China's Industrial Enterprises Earn Record High Profits in April Due to Strong Demand

(Yicai Global) May 28 -- Chinese large industrial firms earned higher profits in April than in the past six months, signaling a rebound caused by an increasing demand amid modest cost growth.

Profits rose 21.9 percent to CNY576 billion (USD90.1 billion), up 19 percentage points compared to the previous month, data issued by China's National Bureau of Statistics shows.

The jump can be explained by accelerating spikes in production and sales, the rallying producer price index and overall modest growth in costs, as well as a relatively low benchmark from last year, said He Ping from the bureau. The period from a year ago was pestered with skyrocketing costs and slow-downs in production and sales growths, and thus the profits rose at a more modest 14-percent pace.

The asset-liability ratio for these firms decreased 0.7 percentage points from last year, standing at 57 percent. State-controlled enterprises shed their debt at a slightly faster 1.5 percentage-point rate, but were still left with an asset-liability ratio of 60 percent.

Beijing has called for tighter controls in property and financial sectors, but at the same time remained calm on manufacturing firms, which provide jobs particularly outside first-tier cities.

The three sectors driving the growth were steel, chemical and automobile industries. Steel and iron processing earnings grew 2.6-fold, chemical raw material and product manufacturing profits rose 46 percent, and automobile production takings increased 13 percent.

Industries of oil and gas extraction and non-metallic mineral products attributed proportionally 13 percent to the increase.

The data includes firms which earn more than CNY20 million in revenue annually from their main operations.

Editor: Emmi Laine

Follow Yicai Global on
Keywords:   National Bureau of Statistics of China,Industrial Enterprises,PROFIT,SOEs,Deleveraging,Supply-Side Reform