China's industrial profits record sharp slump in Dec, but 2016 earnings hit 3-year high

Profits earned by China's industrial firms in December rose 2.3 percent from a year earlier, to 844.4 billion yuan (97.2 billion pounds), the National Bureau of Statistics data showed on Thursday. China's industrial profits in December slumped sharply from 14.5 percent y/y gain posted in November.

Earnings recovery remained uneven across the industrial sector, with coal miners and processors such as steel mills and oil refiners continuing to see sharper gains than other firms. Profits in the coal mining sector surged 223.6 percent in 2016, while those for iron and steel production and processing companies rose 232.3 percent.

The slowdown in December indicated that the country's economy still faces headwinds despite better-than-expected fourth-quarter growth. Many analysts expect China's overall economic growth to cool to around 6.5 percent this year from 6.7 percent in 2016.

Profits for China's industrial companies in 2016 rose the most in three years as a construction boom fuelled a rally in commodity prices. Profits for China's industrial companies in 2016 recorded a strong growth of 8.5 per cent from the previous year, according to official data. Industrial profits fell 2.3 per cent in 2015.