**MNI: 5 Things We Learned From China Industrial Profit Data

     **BEIJING (MNI) - The following are the key points from China's December

industrial profit data, released Friday by the National Bureau of Statistics

(NBS):

     - December industrial profits gained 10.8% y/y to CNY824.2 billion, lower

than the 14.9% growth seen in November. As China's supply-side reform campaign

enters a third year, the capacity-cutting measures are having less impact on

commodity prices and the sectors that have undergone changes. 

     - Profits of large industrial companies tracked by NBS grew 21% y/y to

CNY7.52 trillion in 2017, the highest gain since 2011, dwarfing the 8.5% y/y in

2016. This was largely due to the effects from the supply-side reform.

Limitations placed on the out-of-favour companies boosted prices of products and

hence those able to continue producing.

     - State-owned industrial enterprises were heavily favored by supply-side

reform, as their profits grew 45.1% y/y in 2017, well ahead of the 6.7% growth

seen in 2016. This helped them repay debt, thus reducing non-performing loans

held by banks, most of which are also state-owned. 

     - Profits of private industrial companies rose 11.7% y/y in 2017, only half

the average growth rate of industrial enterprises. While still higher than the

4.8% recorded in 2016, the data clearly showed private companies benefitted

significantly less than SOEs from the reform measures. 

     - The profit margin of industrial enterprises tracked by NBS was 6.46%,

0.54 percentage point higher than last year. 

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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