Adds details, background
BEIJING, October 27 (Reuters) – Profits at Chinese industrial companies rose at a faster pace in September, even as soaring commodity prices and supply bottlenecks squeezed margins and weighed on factory activity.
Profits jumped 16.3% year-on-year to 738.74 billion yuan ($115.72 billion), the statistics bureau said on Wednesday, accelerating from the 10.1% gain reported in August.
The industrial sector has been affected by soaring coal prices, supply shortages and power rationing caused by coal shortages due to emission reduction targets.
But Beijing has taken a series of measures to rein in high metal prices and ease the country’s power shortage, including urging coal miners to increase production and manage power demand at industrial plants.
In October, the government said it would allow coal-fired electricity prices to fluctuate by up to 20% from baseline levels, allowing power stations to pass on more of the high generation costs to commercial and industrial end users.
For the January-September period, profits of industrial enterprises rose 44.7 percent year on year to 6.34 trillion yuan, compared with a 49.5 percent increase in the first eight months of 2021, the bureau said. statistics.
China’s economic growth in the third quarter was the slowest this year, partly due to power shortages and swings in the real estate sector.
Record factory inflation in September is putting pressure on midstream and downstream companies to pass costs on to consumers.
Analysts polled by Reuters expect the People’s Bank of China to refrain from trying to stimulate the economy by reducing the amount of cash banks must hold in reserve until the first quarter of 2022.
Liabilities of industrial companies increased by 8.2% year-on-year at the end of September, after growing by 8.4% at the end of August.
Industrial profit data covers large companies with annual revenues of more than 20 million yuan from their core businesses.
(Reporting by Gabriel Crossley and Liangping Gao; Editing by Sam Holmes and Shri Navaratnam)
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