Beijing, Oct 27 (BNA): Profits of Chinese industrial firms rose at a faster pace in September despite higher prices and supply bottlenecks, thanks mainly to stellar growth in the mining and raw materials industries although some companies are struggling to weed out higher costs.
Profit jumped 16.3 percent year on year to 738.74 billion yuan ($115.72 billion), the statistics bureau said on Wednesday, accelerating from a 10.1 percent gain in August.
The industrial sector has been hit by high coal prices, supply shortages and energy rationing due to coal shortages due to emission reduction targets.
But Beijing has taken a raft of measures to curb soaring metal prices and ease the country’s electricity crisis, including urging coal miners to ramp up production and managing electricity demand in factories.
A strong increase in profits in the mining and raw materials industries led the headline figures. Profits in the coal mining and washing industry grew 172.2% during the first nine months. The fuel processing industry has seen a profit rise of 930% over the same period.
However, energy companies came under pressure, with profits dropping 24.6% between January and September, with tight coal supplies and higher fuel prices eroding bottom line profits.
Zhou Hong, an official with the National Bureau of Statistics, said that soaring commodity prices and supply chain issues still affected the recovery of corporate profits.
“The problem of profit imbalance between primary and manufacturing industries is rather prominent, and the basis for industrial profits recovery has not yet been unified,” Zhou said.
In October, the government said it would allow coal-fired energy prices to fluctuate by up to 20% of base levels, which would enable power plants to pass on more high costs of generation to commercial and industrial end users.
The statistics bureau said industrial companies’ profits in the January-September period, grew 44.7% year on year to 6.34 trillion yuan, slowing from a 49.5% increase in the first eight months of 2021.
China’s economic growth in the third quarter was the slowest this year, due in part to a lack of energy and volatility in the real estate sector.
Record high factory inflation in September is putting pressure on middle and downstream firms to pass costs on to consumers.
Liabilities at industrial firms rose 8.2% from a year earlier at the end of September, reversing the 8.4% growth at the end of August.
Industrial profit data covers large companies with annual revenue of more than 20 million yuan from their main operations.
MI