China’s private economy is still showing profit growth despite the economic slowing, demonstrating its resilience, while state-owned enterprises and foreign invested companies has seen profits fall by almost 60% and 40%, respectively, since the beginning of this year.
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According to the latest National Bureau of Statistics (NBS) figures, China’s economy is still in a slowing trend. In the first two months of this year, profit of industrial enterprises above designated scale (enterprises whose annual income from their main business is more than 5 million yuan) totaled 219.1 billion yuan, a drop of 37.3%, year on year.
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There is debate among analysts as to whether China’s economy is rebounding, but statistics released by NBS show 23 million migrant workers are looking for work and waiting for some bounce in the economies of the US, Europe and Japan that will bring job opportunities in export firms in China’s coastal provinces.
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Among industrial enterprises above designated scale, profit in January and February of state-owned or controlled enterprises totaled 56.7 billion yuan, collective enterprises 5.9 billion yuan, joint-stock enterprises 111.5 billion yuan, and foreign invested enterprises 62 billion yuan, falling 59.2%, 5.9%, 39.7%, and 39.3%, respectively, year on year, while profits of privately-owned enterprises totaled 70.5 billion yuan, a growth of 3.3%, year on year.
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Among 39 major industries, profits from oil and natural gas exploitation, chemicals, building materials, telecoms equipment, special equipment, transportation equipment, and electric power dropped 86.1%, 49.3%, 3.6%, 96.3%, 13.4%, 40.4%, and 77.0%, year on year. The steel industry saw a net loss of 770 million yuan in the first two months, while in the same period of last year its profit totaled 12.8 billion yuan. The chemical fiber industry saw the 1.2 billion yuan profit in the same period last year turn into a net loss of 130 million yuan.
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Not all the statistics were so sad. Coal exploitation experienced 15.0% profit growth. Profits in oil processing and coking grew from negative 19.4 billion yuan in the same months last year to 11.7 billion yuan.
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Industrial inventories were still rising at the end of February. Accounts receivable of industrial enterprises above designated scale totaled 3.9286 trillion yuan, up 7.3%, year on year. Funds invested in finished goods reached 1.9802 trillion yuan, up 11.7%.
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While income gained from enterprises�main business reached 6.0601 trillion yuan, 3.1% down, year on year, tax revenue of industrial enterprises totaled 322.9 billion yuan, an 8.3% hop.
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At the gathering of the G20 summit in London, Chinese leaders have been boasting of the effectiveness of their stimulus policies. Urban fixed-asset investment in the first two months jumped 26.5 percent from a year earlier, new bank lending quadrupled in February and vehicle sales rose 25 percent the same month. The 30 percent gain in the Shanghai Composite Index this year makes it the best-performing among 89 benchmark measures tracked worldwide by Bloomberg.
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The government "has taken prompt, decisive and effective policy measures, demonstrating its superior system advantage when it comes to making vital policy decisions," wrote Zhou Xiaochuan, governor of the People’s Bank of China, in an article published on the central bank’s Web site yesterday.
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