Aug 27 2013, 4:42am CDT | by IANS
The rise in the industrial profit points to further evidence of a firming economy.
The profits of industrial companies with annual revenues of more than 20 million yuan ($3.24 million) hit 419.55 billion yuan in July, Xinhua reported citing China's National Bureau of Statistics (NBS).
In the first seven months, their profits rose 11.1 percent to 3.0 trillion yuan.
Among the 41 industries surveyed, 27 posted year-on-year profit growth during the January-July period, while 11 saw a decline in profits.
Private businesses led the growth, with their combined profits up 15.4 percent year-on-year in the first seven months, while state-run enterprises saw profits up 5.5 percent during the period.
While acknowledging the acceleration of profit growth, NBS analyst He Ping also cautioned that the gains were concentrated in several sectors and the aggregate business profitability remained at a relatively low level as production costs keep climbing.
Electricity, heat production and supply industry saw profits jump to 73.5 percent in the first seven months, and manufacturers of computers, telecommunication and electronics saw their profits rise 29 percent.
Tuesday's data came after a string of other economic indicators, from factory output and retail sales to foreign trade, showed the world's second-largest economy may be gradually stabilising after a protracted slowdown.
HSBC's preliminary reading for China's manufacturing sector showed the Purchasing Managers Index rose to 50.1 in August, the highest level in four months.
"China has shown clear signs of stabilising and the country is on track to meet its annual growth target of 7.5 percent," NBS spokesman Sheng Laiyun said Monday.
China's economic growth eased to 7.5 percent in the second quarter, down from 7.7 percent in the first three months.
Instead of initiating a massive stimulus programme to lift the economy, the authorities are moving cautiously by speeding up shantytown renovation, accelerating railways and infrastructure investments and reducing taxes for small businesses.
As these policies filter through, China's economy is showing mounting signs of stabilisation that has prompted the scale-up of growth forecast for the second half of the year.
Deutsche Bank has recently raised its forecast for China's GDP growth in the second half to 7.7 percent from its previous estimate of 7.6 percent, and Credit Suisse tuned up the annual growth forecast from 7.4 percent to 7.6 percent.
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