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Economy

China industrial profit growth slows, debt concerns remain

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Steel products on display at a market in China’s Hubei Province.   © Kyodo

BEIJING -- Profits earned by China's industrial enterprises rose 4.2% in April from a year earlier, although the pace of growth slowed drastically from March, according to official data released on Friday.

Industrial profits totaled 502.01 billion yuan ($76.54 billion) in April, the National Bureau of Statistics said. Profits in March were 561.24 billion yuan, an 11.1% percent increase from the previous year.

April's slowdown was led by a 5.9% decline in profits from makers of computer and communications equipment and other electronic goods, along with an 11% decline in energy production sector profits.

At the same time, overall profit figures were buttressed by growth among "apparel and ornament" companies, whose net income collectively rose 7.1% from April 2015.

The NBS said a recent slowdown in steel and nonferrous metal industries is "bottoming out," while profits from the ferrous metals manufacturing sector grew at 41.9% from last April. Smelting and rolling manufacturing enterprise profits also grew by 6.6%.

Friday's data covers all large enterprises drawing annual revenue of 20 million yuan or more from their main operations.

Company debt for April rose 4.8% from the previous year, a slight decline from the 5.2% growth seen in March, though overleveraging concerns remain. Zhou Xiaochuan, governor of the People's Bank of China, warned in March that "lending and other debt as a share of GDP, especially corporate lending and other debt as a share of GDP, is on the high side."

However, the Ministry of Finance said on Thursday that government debt is under control with room for further growth, according to the state-run Xinhua news agency.

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