Growing October industrial profits show economic stabilization

THE profits of Chinese industrial companies grew for a second month in October, indicating strengthening economic stabilization in the world's largest manufacturing base.

Net earnings among Chinese industrial companies rose 20.5 percent from a year earlier last month to 500.1 billion yuan (US$80.2 billion), the National Bureau of Statistics said this morning.

It accelerated sharply from the increase of 7.8 percent in September and compared with the cut of 6.2 percent in August.

In the first 10 months, profits of Chinese industrial companies managed to grow 0.5 percent to 4.02 trillion yuan, reversing the contraction of 1.8 percent in the first three quarters.

"It is encouraging to see China's manufacturing sector started to earn money again, which proved recovering demand and provided foundation for more investment," said Li Maoyu, an analyst at Changjiang Securities Co.

Among the 41 industries tracked by the national statistics bureau, 27 reported profit growth during the January-October period, led by electricity generation and power supply industry, whose profit surged 57.5 percent.

The earning of information technology machinery production expanded 10 percent in the first 10 months, and that of automobile manufacturing gained 9 percent.

Private business reported a profit growth of 17 percent in the months to October, while earning of foreign-invested firms and those from Hong Kong, Macau and Taiwan still slumped 9.2 percent. State-owned enterprises said their profit also fell 9.2 percent.

The latest evidence of a strengthening industrial sector in China also included the jump of the preliminary reading of the HSBC China Manufacturing Purchasing Managers' Index, which climbed to a 13-month high of 50.4 for November. It picked up from 49.5 in October, and bounced back to indicate expanding manufacturing activities in largely private and export-oriented companies.

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