China Touts its Industrial Strength

China’s National Bureau of Statistics has announced that the country’s “industrial companies” made profits of $78 billion during the first 10 months of the year, calling it an increase of 46 per cent compared with profits earned during the same period in 2002.

According to a report in the China Daily, Beijing, “Profits made by State-owned industrial firms and firms in which the State holds a majority hit $38.2 billion during the period, a year-on-year increase of 54 percent.”

The same announcement from the Bureau of Statistics noted that, “During the first 10 months, sales income earned by industrial firms reached $1.34 trillion, a year-on-year increase of 27.9 percent.”

A bureau economist quoted by the China Daily cited “the country’s fast fixed asset investment,” an upgrade of domestic consumption structure, the adjustment of industry structure and price changes on the international market as growth factors.

He said profits made by a majority of the industrial sectors continued to grow during the January-October period.

Among the sectors cited as growing ones by the economist, Yao Jingyuan, were “ferrous metal smelters,” with profits increasing by $3.2 billion.

Also in the news report, Wang Zhao, a researcher with the State Council’s Development Research Centre, said the growth in profits suggests the Chinese economy is developing well and “was a result of the country's implementation of pro-active fiscal and sound monetary policies.”

China’s gross domestic product grew 8.5 per cent during the first nine months of the year compared to 2002 figures.

Not all investment analysts are convinced that the profits are being calculated in conformity with accepted accounting principals.

On the same day the Bureau of Statistics figures were released, a Chinese banking regulator made comments in the Financial Times that banks based in China would begin following 10 new guidelines to reduce the number of non-performing loans.

“You can see a lot of time bombs binding together (at lower levels) to become an atom bomb,” Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), told the Financial Times.