Asia Economy

Profits at China's Factories Jump as Economy Recovers

Labors work at a factory's workshop in Huaying, Sichuan province of China.
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Annual growth of China's industrial profits quickened to 22.8 percent in November from October's 20.5 percent, official data showed on Thursday, reinforcing signs of a steady economic recovery thanks to pro-growth policies.

Chinese industrial firms made 638.5 billion yuan ($102.4 billion), China's National Bureau of Statistics (NBS) said in a statement published on its website, www.stats.gov.cn.

A second month of strong double-digit profit growth reinforces the view of analysts that China's economy has gathered momentum in the fourth quarter. Factory profits rose only 7.8 percent in September from a year earlier.

Industrial profits in the first 11 months of 2012 totaled 4.66 trillion yuan, up 3 percent from a year earlier, the bureau said. For the January-October period, profits had been up only 0.5 percent from a year earlier.

Among 41 sectors surveyed by the bureau, 30 reported rising profits in the first 11 months, led by a 62.9 percent jump for power generation firms, a 16.6 percent rise for food processing firms and 11.5 percent for telecommunications equipment makers.

But some sectors are still struggling, with profits of ferrous metal smelting firms tumbling 47.9 percent while earnings of chemical companies falling 10.1 percent.

In the first 11 months of 2012, these firms had losses that were more than four times larger than what they lost a year earlier.

China's economy is strengthening in the fourth quarter, following seven straight quarters of slower growth, thanks to new pro-growth policies rolled out by the government in recent months, including approvals for $157 billion worth of infrastructure projects.

According to a Reuters poll, China is on course to achieve growth of 7.7 percent in 2012, the slowest full year of expansion since 1999.

Chinese leaders have promised to maintain a "prudent" monetary policy and pro-active fiscal policy in 2013, leaving room for manoeuvre in the face of global economic risks while deepening reforms to support long-term growth.