Industrial firms continued to record a profit in the first eight months of the year, but with a decelerating growth pace. Economists said the softening profit growth was probably plagued by a slowing increase in exports amid the global economic slowdown. Mainland industrial firms made profits of 286.15 billion yuan (about HK$268.12 billion) between January and August, up 15.8 per cent from the same period last year, the State Statistical Bureau announced yesterday. However, profit growth for August was 4.6 percentage points lower than in the first seven months of this year. The bureau did not offer an explanation but some analysts suggest that the slowdown in Chinese exports may be a factor. 'It could be export-related industry sectors because of the much more subdued growth in exports or even negative growth, that could be the trouble of the past sales revenues and profits,' said Fred Hu Zuliu, head of Greater China economic research at Goldman Sachs. State-owned industrial firms accounted for 155.55 billion yuan of the profits between January and August, up 13.7 per cent from a year earlier. However, the profit growth of these firms also slowed much more, growing 5.7 percentage points less than in the first seven months. Meanwhile, losses of state-owned industrial enterprises that are already losing money totalled 52.18 billion yuan in the first eight months, down 2.7 per cent year on year, according to the bureau. Losses at all types of industrial firms were 83.69 billion yuan, down 0.03 per cent year on year. Analysts have questioned such figures because they are calculated using domestic accounting standards instead of international accounting standards. 'In general, I'm still not very comfortable with the numbers on profits so I tend not to take this kind of stuff too seriously,' Mr Hu said. In 1997, then vice-premier Zhu Rongji vowed to turn around the majority of unprofitable large and medium-size state-owned enterprises in three years. China declared victory last year, but has since qualified its boast. Only 30 per cent of the improved performance was because of increased efficiency while the rest was attributable to a good economic environment and state support, the State Economic and Trade Commission has said.