China factory profit back to growth after year of decline

The NBS releases nationwide year-to-date profit data for February,May,August and November. Economists attributed the rise largely to a low base of comparison in the final months of 2008,when the world’s third-largest economy was hit hard by the global financial crisis.

“But we cannot ignore that the sequential growth rate has also picked up since April,” said Gao Shanwen,chief economist at Essence Securities in Beijing.

The energy and natural resources sectors,including power,steel and nonferrous metals,saw strong improvement on recovering demand and prices,chiming with other indicators to suggest that the economy’s recovery is gaining momentum.

Premier Wen Jiabao on Sunday gave a cautious outlook for the domestic economy in 2010,saying it was too early to wind down the government’s stimulus policies but that officials needed to be attentive to surging property prices and incipient inflation.

Private Chinese companies,and foreign-invested companies,saw the biggest profit rebound.

Profit at private companies rose 17.4 percent from a year earlier compared with a rise of 6.6 percent in January through August. Profit at foreign companies rose 16.9 percent from a year earlier,compared with a 6.6 percent fall in the first eight months of the year.

“The profit improvement of foreign enterprises and private sector players shows that the effects of government pump-priming stimulus measures have spread to more sectors,which means the economic recovery is on more solid footing,” Gao added.

China likely to become top exporter

BEIJING: China is likely to overtake Germany as the world’s largest exporter in 2009,despite a sharp fall in shipments as the global downturn took its toll,a high-ranking trade official has said. The countrys share of global trade is expected to exceed nine percent this year,up from 8.86 per cent in 2008,vice commerce Minister Zhong Shan said at a forum here on Sunday. China will probably surpass Germany to become the largest exporting country, he said,according to a statement posted on the ministry’s website. However,2009 was a tough year for the Asian giant with full-year exports predicted to decline by 16 per cent on-year,Zhong added the biggest decline in at least three decades,according to available ministry data. He blamed the drop on “severely weak international demand” and “rising trade protectionism”,adding the value of trade disputes brought against China in terms of potential losses doubled this year to $12 billion. It will face an even more complicated trade situation in 2010 given uncertainties in demand. Reuters