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China's industrial profits plunge
29
Jan '16
Amid an economic slowdown, profits of China's major industrial firms in 2015 fell year on year for the first time in over a decade, fuelling concern for the world's second-largest economy.

Cumulative profits of China's industrial enterprises fell 2.3 per cent in 2015, the National Bureau of Statistics said, after a 3.3 per cent gain the prior year that was the weakest in at least 15 years. Profits in December fell 4.7 per cent from a year earlier, slumping for a seventh month, after a 1.4 per cent drop in November.

He Ping, an official with the NBS Department of Industry, attributed the annual drop to weak demand both at home and abroad, falling prices of industrial products and rising production costs.

Revenues from the firms' primary business inched up 0.8 per cent last year, compared with a 7-per cent rise posted in 2014.

The profits decline was most alarming in mining and raw material industries like oil and natural gas exploitation. Coal miners' profits tumbled 65 per cent from a year earlier while that of oil and natural gas exploration firms slumped 74.5 per cent on an annual basis.

Although the overall situation is grim, He said there were favorable signs from industrial restructuring. The high-tech industry, equipment manufacturing enterprises and consumer goods producers posted profit gains of 8.9 per cent, 4 per cent and 7 per cent, respectively.

State-owned enterprises registered a profit drop of 21.9 percent for the full year, compared with a 3.7 percent rise in the earnings for privately owned firms.

Faced with stubborn downward pressures, China's policy makers are striving to ensure short-term growth while steering the economy away from an export-driven and credit-fueled growth model to one based on stronger consumer spending, innovation and the service sector.

China's GDP grew 6.9 per cent in 2015, the slowest in 25 years. (SH)

Fibre2Fashion News Desk - India

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