Chinese industrial companies’ profit rose 4.5 percent in March, rebounding from the first January-February decline since 2009 as demand strengthened.
Company profits climbed from a year earlier to 438.9 billion yuan ($69.6 billion), the National Bureau of Statistics said on its website today. Net income dropped 5.2 percent in the first two months of 2012.
The pickup in profit growth, following gains last month in industrial production, may reduce the urgency for the government to ease monetary policy more aggressively to bolster demand. Premier Wen Jiabao said this week that the nation “has confidence that it will sustain steady and robust economic growth.”
“A marked recovery will likely emerge around May in line with the trend of economic growth, driven by demand from a rise in export orders and start of new government-directed infrastructure projects,” Li Huiyong, chief economist at Shanghai-based SWS Research Co., said before the report.
The Shanghai Composite Index fell 0.2 percent at 9:42 a.m. local time.
The world’s second-largest economy expanded 8.1 percent in the first quarter from a year earlier after rising 8.9 percent in the previous three months. Manufacturing may have shrunk for a sixth month in April, a preliminary reading of the purchasing managers’ index from HSBC Holdings Plc and Markit Economics indicated April 23.
Delay Cutting Ratio
Even so, authorities have held off from cutting banks’ reserve-requirement ratio, a delay that may stem from concern about fueling a rebound in inflation.
Industrial profit for the first quarter fell 1.3 percent from a year earlier to 1.04 trillion yuan, the bureau said. Companies’ combined sales climbed 14.1 percent in the quarter to 19.8 trillion yuan, compared with a rise of 13.4 percent in the first two months, today’s data showed.
Sany Group Co., the construction-equipment maker run by billionaire Liang Wengen, broke ground on a 10 billion-yuan industrial park in the southern province of Guangdong to make port and marine engineering facilities, the official Xinhua News Agency reported on April 25.
Starting last year, the statistics bureau raised the minimum annual sales for businesses included in the survey to 20 million yuan from 5 million yuan.
--Victoria Ruan. With assistance from Ailing Tan in Singapore. Editors: Scott Lanman, Stephanie Phang
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