Profit growth in China's industrial sector picked up in October, aided by stronger sales and higher prices, suggesting further strengthening of the world's second-largest economy, though growth was skewed towards high-polluting heavy industry. There has been widespread speculation in China's commodities futures market this year, with coal prices hitting records in recent weeks, and economists say growth driven by loose money policies won't last.
Indeed, a subdued property market is expected to drag on growth in the first two quarters next year, as policymakers introduce curbs to cool home prices, which could hit profits of companies producing construction materials. Profits in October rose 9.8 percent to 616.1 billion yuan ($89.1 billion), the National Bureau of Statistics (NBS) said in a statement on Sunday. Profits in September rose 7.7 percent.
Industrial profits rose 8.6 percent in the first 10 months from the same period a year earlier, similar to an 8.4 percent growth rate in the first nine months of the year. Profits in the coal mining sector rose 112.9 percent for January-October from the same period a year earlier while manufacturing profits rose 13.2 percent.