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Here is more evidence of an economy that's picking up steam。
China’s economic rebound filters through to bottom line - FT.com
September 27, 2013 7:42 am
Chinas economic rebound filters through to bottom line
By Simon Rabinovitch in Shanghai
Chinese industrial profits soared 24.2 per cent year-on-year in August as the economys recovery filtered through to corporate bottom lines.
The sharp jump in pre-tax profit growth, more than double Julys 11.6 per cent increase, was partly the result of a low base of comparison, and analysts cautioned that it would be difficult to sustain in coming months.
Nevertheless, it is the latest in a series of data points from manufacturing surveys to investment figures to show that the third quarter has been a good one for the Chinese economy after a shaky first half of the year.
From the perspective of companies it is a bottoming-out process. Orders have recovered and they are now beginning to restock, said Ma Xiaoping, an economist with HSBC. The stabilisation is proceeding month by month, with each better than the last. But so far it hasnt been that quick, so we should be prudent.
The industrial profits data revealed that some sectors, including producers of ferrous metals, had started to experience turnrounds after many months of losses. The national statistics bureau said that automobile producers and power companies were also highly profitable.
Of the 41 industries surveyed, 25 posted profit growth in the first eight months of the year, while 14 saw losses. The average industrial profit growth over the first eight months of the year was 12.8 per cent, it added.
He Ping, an analyst with the statistics bureau, said August of 2012 had been a particularly weak month, flattering year-on-year comparisons. But he added that sales had been strengthening while costs remained low, bolstering profits.
The industrial profit figures follow a range of macroeconomic indicators, but offer one of the earliest glimpses into corporate performance in China. The Shanghai Composite, the countrys main stock index, stabilised on Friday after the data were published, following a nearly 2 per cent decline a day earlier.
Analysts have questioned how sustainable Chinas rebound will be. It has been driven in part by a big flood of credit issuance at the start of the year, but the government has reined in credit growth in recent months. A sharp run-up in housing prices in recent months has also raised the possibility of fresh tightening measures.
For now, however, the Chinese economy is outperforming expectations. When it slowed to 7.5 per cent growth year-on-year in the second quarter and faced a cash crunch at the end of June, many analysts had predicted a steeper slowdown over the rest of the year.
Instead, growth appears to have stabilised and even picked up. Ms Ma of HSBC forecast that the Chinese economy would expand 7.8 per cent in the third quarter.
China’s economic rebound filters through to bottom line - FT.com
September 27, 2013 7:42 am
Chinas economic rebound filters through to bottom line
By Simon Rabinovitch in Shanghai
Chinese industrial profits soared 24.2 per cent year-on-year in August as the economys recovery filtered through to corporate bottom lines.
The sharp jump in pre-tax profit growth, more than double Julys 11.6 per cent increase, was partly the result of a low base of comparison, and analysts cautioned that it would be difficult to sustain in coming months.
Nevertheless, it is the latest in a series of data points from manufacturing surveys to investment figures to show that the third quarter has been a good one for the Chinese economy after a shaky first half of the year.
From the perspective of companies it is a bottoming-out process. Orders have recovered and they are now beginning to restock, said Ma Xiaoping, an economist with HSBC. The stabilisation is proceeding month by month, with each better than the last. But so far it hasnt been that quick, so we should be prudent.
The industrial profits data revealed that some sectors, including producers of ferrous metals, had started to experience turnrounds after many months of losses. The national statistics bureau said that automobile producers and power companies were also highly profitable.
Of the 41 industries surveyed, 25 posted profit growth in the first eight months of the year, while 14 saw losses. The average industrial profit growth over the first eight months of the year was 12.8 per cent, it added.
He Ping, an analyst with the statistics bureau, said August of 2012 had been a particularly weak month, flattering year-on-year comparisons. But he added that sales had been strengthening while costs remained low, bolstering profits.
The industrial profit figures follow a range of macroeconomic indicators, but offer one of the earliest glimpses into corporate performance in China. The Shanghai Composite, the countrys main stock index, stabilised on Friday after the data were published, following a nearly 2 per cent decline a day earlier.
Analysts have questioned how sustainable Chinas rebound will be. It has been driven in part by a big flood of credit issuance at the start of the year, but the government has reined in credit growth in recent months. A sharp run-up in housing prices in recent months has also raised the possibility of fresh tightening measures.
For now, however, the Chinese economy is outperforming expectations. When it slowed to 7.5 per cent growth year-on-year in the second quarter and faced a cash crunch at the end of June, many analysts had predicted a steeper slowdown over the rest of the year.
Instead, growth appears to have stabilised and even picked up. Ms Ma of HSBC forecast that the Chinese economy would expand 7.8 per cent in the third quarter.
