China's industrial profit decline quickens

BEIJING -- The profits of China's major industrial firms in 2015 fell year on year for the first time in over a decade, official data showed on Wednesday, fuelling concern for the world's second-largest economy.

Industrial companies with annual revenues of more than 20 million yuan ($3.1 million) recorded total profits of 816.7 billion yuan last month, down 4.7 percent from December 2014 and accelerating from November's 1.4-percent drop, the National Bureau of Statistics (NBS) said.

The firms' profits in the whole of 2015 fell 2.3 percent from 2014 to around 6.4 trillion yuan.

He Ping, an official with the NBS Department of Industry, attributed the annual drop to weak demand both at home and abroad, falling prices of industrial products and rising production costs.

Revenues from the firms' primary business inched up 0.8 percent last year, compared with a 7-percent rise posted in 2014.

The profits decline was most alarming in mining and raw material industries like oil and natural gas exploitation. Coal miners' profits tumbled 65 percent from a year earlier while that of oil and natural gas exploration firms slumped 74.5 percent on an annual basis.

Although the overall situation is grim, He said there were favorable signs from industrial restructuring. The high-tech industry, equipment manufacturing enterprises and consumer goods producers posted profit gains of 8.9 percent, 4 percent and 7 percent, respectively.

Facing lingering downward pressures, China's policy makers are striving to ensure short-term growth while steering the economy away from an export-driven and credit-fueled growth model to one based on stronger consumer spending, innovation and the service sector.

GDP growth slowed to 6.9 percent in 2015, the lowest level in 25 years.