State firms post 9.2pc profit growth for October

Profits at state-owned enterprises last month rose 9.2 per cent from September, fuelled by strong sales growth for big-ticket consumer items such as cars and homes, the Ministry of Finance said.

For the first 10 months of this year, profits at state firms were down 10.6 per cent from a year earlier, a moderation from the 17.6 per cent drop for the first three quarters, the ministry said in a report posted on its website yesterday.

Profits for the first 10 months totalled 1.064 trillion yuan (HK$1.21 trillion), the ministry said.

But in terms of revenue, state firms saw their first year-on-year growth this year after declining for nine months. Total revenue rose 0.5 per cent in the January-October period to 17.874 trillion yuan compared with a year earlier, it said.

The improvement in state firms' profits reflected the recovery in the broader mainland economy.

A wave of data for last month released last week suggested growth in the world's third-largest economy was accelerating, benefiting from the government's massive stimulus plan and increased private consumption.

The government put in place a series of stimulus measures to fuel consumption, including tax cuts for car and property purchases and subsidies for home appliances in rural areas.

The ministry report said the vehicle, petrochemical, property development and construction materials industries saw the biggest growth in profits, while the oil, steel and electronics sectors suffered the worst declines.

Last week, the China Association of Automobile Manufacturers said vehicle sales rose 72 per cent year on year to 1.22 million units last month, taking total sales to 10.89 million units in the first 10 months, up 36.2 per cent from a year ago.

Earnings at all state businesses in the country continued to drop, falling 10.6 per cent to 1.064 trillion yuan in the first 10 months.

The rate of decline was seven percentage points lower than for the first nine months.

Firms directly controlled by the central government posted combined profits of 767.85 billion yuan in the first 10 months, down 7.4 per cent from a year earlier.

Those state enterprises backed by local governments registered profits of 296.5 billion yuan, down 17.9 per cent.

Revenue of state companies directly held by the central government posted 1.5 per cent year-on-year growth to 11.239 trillion yuan.

Inventories at these firms rose 7.2 per cent in the first 10 months from the same period a year earlier, compared with a 6.7 per cent increase in the first nine months.

The figures for last month alone were not given, but the report said business revenue was 3.9 per cent lower than in September, while profits were up 9.6 per cent.

In a separate report, the ministry said the country's fiscal revenue last month surged 28.4 per cent to about 684.5 billion yuan, a net rise of 151.6 billion yuan from October last year.

Fiscal revenue in the first 10 months hit 5.836 trillion yuan, an increase of 7.5 per cent or 408.8 billion yuan year on year.

Consumption taxes had surged 83.8 per cent year on year in the first 10 months of this year.

But growth in oil product and tobacco consumption taxes was the factor behind the surge in consumption taxes. If revenue from these levies was removed, the growth would be only 7 per cent.

Big buys

Strong sales of big-ticket items such as cars and homes fuelled growth

The increase in vehicle sales in the first 10 months of this year: 36.2%

The increase in the government's fiscal revenue in the first 10 months: 7.5%