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Asia Economy Last Updated: Jan 29, 2015 - 7:34 AM

Profits of Chinese industrial businesses plunged in 2014
By Michael Hennigan, Finfacts founder and editor
Jan 28, 2015 - 7:04 AM

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China added a record 17m new cars on the road in 2014 as car ownership reached 154m, said the Ministry of Public Security on Tuesday. Image: China.org.cn

Profits of Chinese industrial businesses rose to 6.47tn yuan (US$1.05tn) in 2014, up 3.3% year on year, official data showed on Tuesday. However, the growth rate plunged 8.9 percentage points from 2013, the National Bureau of Statistics (NBS) said.

The bureau's calculations include companies with annual revenues exceeding 20m yuan.

In December 2014 alone, these companies' combined profits fell 8% year on year to 850.73bn yuan, widening from a 4.2-percent decline in November.

According to Xinhua, the official news agency, NBS statistician He Ping attributed the profit decrease to lower prices, rising costs and significant profit declines in the oil and coal industries.

Out of 41 industry categories, 28 reported year-on-year profit increases and two remained flat. Eleven industries, including oil and natural gas, saw profits fall.

The mining industry saw a 23% profit drop and raw materials registered a 1.4% drop, while the consumer goods industry reported year-on-year profit growth of 5%.

"This means that China's economic growth is shifting from investment-driven to consumer-led growth," said He.

Last week the National Bureau of Statistics unveiled a raft of economic figures for 2014 on Tuesday, highlighting the country's shift in economic structure.

Here are some key numbers available to better understand China's development last year:

  • Gross domestic product (GDP) expanded 7.4% year on year to 63.65tn yuan (US$10.4tn), the slowest pace since 1990.
  • Consumer price index, a main gauge of inflation, rose 2%, below the government's target of 3.5%.
  • Foreign trade rose 2.3% to 26.43tn yuan, with export up 4.9% and import down 0.6%.
  • Grain output rose 0.9% to 607.1m tonnes, marking the 11th consecutive year of growth.
  • In real terms, industrial value-added output rose 8.3%, fixed-asset investment rose 15.1%, while retail sales of consumer goods rose 10.9%.
  • Narrow money supply (M1), which covers cash in circulation plus that in current corporate deposits, rose 3.2% to 34.81tn yuan.
  • China's broad money supply (M2), which covers cash in circulation and all deposits, increased 12.2% to 122.84tn yuan by the end of last year.
  • Population on the Chinese mainland stood at 1.37bn people by the end of 2014, up 0.52%.
  • Permanent urban residents reached 749.16m, accounting for 54.77% of the total population.
  • By the end of 2014, 772.53m people were employed in China, up 2.76m, or 0.36%.
  • A total of 13.22m new jobs were created in cities, beating the government target of creating 10m jobs.
  • Per capita disposable income of all residents rose 8% to 20,167 yuan, with that for rural residents up 9.2% and 6.8% for urban residents.
  • The Gini coefficient, an index reflecting the rich-poor gap, stood at 0.469 in 2014, dropping for six years in a row after the index hit 0.491 in 2008.

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