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China profit growth quickens, no harbinger of recovery

A worker assembles components at a workshop of Bernard Controls in Beijing April 25, 2013. REUTERS/Ed Jones/Pool
A worker assembles components at a workshop of Bernard Controls in Beijing April 25, 2013. REUTERS/Ed Jones/Pool

BEIJING (Reuters) - China's industrial profits growth quickened in April from the previous month, though the government noted that the pickup was due mainly to a low comparative base, indicating that the world's second largest economy still faces slack domestic and external demand.

Chinese firms made profits of 436.7 billion yuan ($71.22 billion) in April, up 9.3 percent from the same month last year, quickening from a year-on-year growth of 5.3 percent in March, the National Bureau of Statistics said on Monday.

The improved gains in April were caused by the low comparison base in the same month a year earlier, Yu Jianxun, an official from the bureau's industrial department, said in a statement accompanying the data.

Profits had fallen 2.2 percent in April last year from 2011, compared with gains of 4.5 percent year-on-year growth in March 2012, said Yu.

In the first four months on 2013, Chinese firms made total profits of 1.61 trillion yuan, up 11.4 percent from the same period a year ago, the NBS said (www.stats.gov.cn).

Among the 41 industries tracked, 30 posted profit growth and eight reported a profit drop in the first four months compared with the year earlier period. Three sectors reported turnarounds in profitability.

Profits for manufacturers of computers, telecommuications equipment and electronics were up 44.8 percent from the same period last year, while those in the electricity and heat production and supply industry leapt 92.6 percent.

The ferrous metal smelting and rolling industry reported a 38.6 percent year-on-year increase in profits during the period, while profits in auto manufacturing rose 12.9 percent.

Petroleum refining, coking and nuclear fuel processing sectors swung into profit from losses in the first four months, while profits in oil and gas exploration dropped 7.9 percent.

The figures come after the HSBC/Markit flash purchasing managers index, the earliest indicator of China's industrial activity, showed a contraction for the first time in seven months in May as new orders fell.

The PMI added to concerns that China's economic recovery has stalled and that a sharper cooldown may be imminent.

($1 = 6.1316 Chinese yuan)

(Reporting By Xiaoyi Shao and Kevin Yao; editing by Jonathan Standing)

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