(Yicai Global) Jan. 27 -- Profits earned by China’s industrial firms jumped 34.3 percent last year thanks to higher-priced goods, despite a sharp slowdown in earnings growth in the last two months, according to official figures released today.

Industrial companies with at least CNY20 million (USD3.1 million) in annual revenue earned combined profits of CNY8.7 trillion (USD1.4 trillion) in 2021, data from the National Bureau of Statistics showed.

Profits rose 4.2 percent in December to CNY734.2 billion (USD115.6 billion), the slowest pace since April 2020, down from a 9 percent clip in November and 24.6 percent in October.

Gains slowed markedly in the last two months of 2021, noted Zhu Hong, a senior NBS statistician. Small and medium-sized companies in particular faced operational pressures and many firms saw losses widen, he said, adding that the challenges will continue this year.

Since China plans to cut taxes further, profits will largely get a boost this year, Zheng Houcheng, director of the Yingda Securities Research Institute, told Yicai Global. Industrial profits could rise by more than 10 percent this year, he said.

Middle and downstream firms still face problems due to high costs, said Gao Ruidong, managing director at Everbright Securities, noting that they are burdened with full inventories and are unable to access enough finance. To support manufacturing and guarantee stable prices a looser monetary policy is needed, he added.

In breakdown figures for last year, mining and raw-materials companies saw profits leap 191 percent and 71 percent, respectively, far higher than the average, with high-tech manufacturing making a great contribution, said Zhu. Profits at pharmaceutical firms and telecom equipment makers increased 78 percent and 44 percent, respectively.

Editors: Dou Shicong, Futura Costaglione