Chinese industrial companies’ profits rose 28.3 percent in the first seven months of 2011 from a year earlier, helping to support the expansion of the world’s fastest-growing major economy.
Net income climbed to 2.8 trillion yuan ($438 billion), the National Bureau of Statistics said on its website. That compares with a 28.7 percent gain from January through June. Profit for the nation’s industrial companies was 2.4 trillion yuan in the first half.
Demand for China’s exports is under threat as the U.S. recovery weakens and European officials grapple with a sovereign-debt crisis. Higher profits may help to sustain investment, preventing a deeper slowdown in an economy that grew 9.5 percent in the second quarter.
“China is on track for a soft-landing, barring any black- swan scenarios such as a breakup of the euro zone,” said Lu Ting, a Hong Kong-based economist at Bank of America-Merrill Lynch. “The country has become less dependent on exports compared with the financial crisis years.”
Industrial companies’ revenue rose 29.8 percent to 45.9 trillion yuan in the seven months through July, according to Saturday’s statement. Revenue was 38.9 trillion yuan for the first half of this year.
Declines in some commodity prices since April may ease cost pressures that have pared some companies’ profits. Crude in New York has fallen more than 25 percent since reaching a 31-month high above $114 a barrel in late April.
Angang Steel Co., the largest Hong Kong-traded Chinese steelmaker by market value, and Li Ning Co., China’s largest maker and retailer of sportswear, are among companies to have reported rising costs and weaker profits.
UBS AG this week reduced a forecast for China’s economic growth this year to 9 percent from a previous estimate of 9.3 percent, citing weakness in developed economies.
Growth may be supported by investment as manufacturers shift production to inland provinces and the government spends more on public housing and infrastructure.
The statistics bureau’s data covers companies with annual sales of at least 20 million yuan in 39 industries, including oil and gas exploration, chemicals, transportation equipment manufacturing, telecommunications, and power generation.
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