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Employees at the BMW Brilliance Automotive Ltd. Tiexi plant work on an assembly line in Shenyang, Liaoning province, China. (Bloomberg) |
China’s industrial-profit growth rebounded in July, adding to signs that the world’s second-biggest economy is stabilizing after a two-quarter slowdown and an interbank lending squeeze in June.
Net income rose 12 percent from a year earlier after gaining 6.3 percent in June, the statistics bureau said in Beijing Tuesday. Power, telecommunications, and auto manufacturing contributed to the increase, while coal miners’ profits slid.
Tuesday’s data add to higher-than-forecast industrial production in July, a rebound in trade, and a stronger reading for a manufacturing index released last week. Premier Li Keqiang will achieve his 7.5 percent growth target this year, according to a Bloomberg News survey of economists this month.
“This is another indicator that helps to paint a positive picture for the near-term growth outlook,” said Chang Jian, China economist at Barclays Plc in Hong Kong. The economy may expand 7.6 percent from a year earlier this quarter, up from 7.5 percent in the second quarter, she said.
At the same time, Chang said she was cautious about the medium term as the nation grapples with industrial overcapacity, declines in export competitiveness, property oversupply and risks for the financial system.
In Tokyo, meanwhile, expert panels are meeting this week to discuss the threat that a planned sales-tax increase to 8 percent from 5 percent in April next year poses to the nation’s recovery because of the likely blow to consumption. (Bloomberg)
