China's industrial profits grow faster in first eight months

BEIJING — China's major industrial firms posted faster profit growth in the first eight months of this year, the National Bureau of Statistics (NBS) said Wednesday.

Industrial companies with annual revenue of more than 20 million yuan (about $3.02 million) reported profits of 4.92 trillion yuan in the first eight months, a 21.6-percent increase from one year earlier, the NBS said in a statement.

The strong growth marks a pick-up from the 21.2 percent in the January-July period.

In August alone, profits of major industrial firms rose 24 percent year-on-year, much faster than the 16.5-percent growth in July, the NBS said.

Among the 41 industries surveyed, 39 posted year-on-year profit growth during the first eight months.

NBS statistician He Ping said the strong growth was a result of price hikes in industrial products and lower production costs.

China's producer price index (PPI), which measures costs of goods at the factory gate, rose 6.3 percent year-on-year in August, 0.8 percentage point higher than the July level.

The price rebound has added some 127.3 billion yuan to the August industrial profits, accounting for 31.2 percent of the total profit increase last month, said He.

Meanwhile, for each 100 yuan of revenue, companies had to spend 85.44 yuan, a 0.64-yuan decrease from the same period last year, NBS data showed.

He also mentioned that the leverage ratio of Chinese industrial firms is on the decline amid the government's ongoing supply-side structural reform. By the end of August, their debt-asset ratio dropped 0.7 percentage point from a year ago to 55.7 percent.