China industrial profit growth accelerates despite rising price of coal, supply shortages, power rationing

Profits at China’s industrial firms jumped 16.3 per cent year on year to 738.74 billion yuan (US$115.7 billion), quickening from the 10.1 per cent gain in August

China’s industrial sector has been hit by the surging price of coal, supply shortages and power rationing triggered by coal shortages due to emission reduction targets

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The industrial profit data covers large firms with annual revenues of over 20 million yuan (US$3.1 million) from their main operations. Photo: Xinhua

Published: 10:36am, 27 Oct 2021Updated: 11:09am, 27 Oct 2021

Profits at China’s industrial firms rose at a faster pace in September despite surging prices and supply bottlenecks, thanks mainly to stellar growth in mining and raw materials industries although some businesses struggled to shake off the high costs.

Profits jumped 16.3 per cent year on year to 738.74 billion yuan (US$115.7 billion) the National Bureau of Statistics (NBS) of China said on Wednesday, quickening from the 10.1 per cent gain reported in August.

The industrial sector has been hit by the surging price of coal, supply shortages and power rationing triggered by coal shortages due to emission reduction targets.

But Beijing has taken a raft of measures to curb elevated metals prices and ease the country’s power crunch, including urging coal miners to boost output and manage electricity demand at industrial plants.

Strong profit rises in mining and raw materials industries drove the headline figures. Profits in the coal mining and washing industry grew 172.2 per cent over the first nine months. The fuel processing industry saw earnings skyrocket 930 per cent over the same period.

Power firms were squeezed however, with profits falling 24.6 per cent between January and September, with tight coal supplies and higher prices of the fuel eroding bottom-lines.