China state firms' profit growth quickens as economy improves

Reuters

BEIJING (Reuters) - Annual profit growth of China's state firms accelerated to 10.5 percent in the first nine months from 9.7 percent in the January-August period, official data showed on Friday. reinforcing views that the economy is regaining some traction.

State-owned non-financial companies made combined profits of 1.77 trillion yuan ($290 billion) for January-September, up 10.5 percent from the same period a year ago, the Ministry of Finance said in a statement on its website.

The world's second-largest economy grew at its quickest pace this year between July and September, underpinned by investment, although analysts question if the vigour would last through coming months.

Firms owned by the central government posted an annual rise of 16.3 percent in profits in the first nine months. Companies owned by local governments reported a drop of 2.4 percent.

The ministry said firms in the power, electronics, transport and petrochemical saw sharp profits rise, while those in non-ferrous metals, chemical, coal and machinery sectors suffered big drops in earnings.

State firms' combined revenues rose 11 percent between January and September from the year-earlier period, while operating costs also grew 11 percent, the ministry said.

Beijing has pledged to increase the proportion of earnings paid out by state companies in dividends, as part of reforms to address income inequality. ($1 = 6.0982 Chinese yuan)

(Reporting by Kevin Yao; Editing by Simon Cameron-Moore)

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