China's industrial companies made profits of 647.3 billion yuan (US$78 billion) during the first 10 months of the year, an increase of 46 percent compared with 2002, the National Bureau of Statistics said Tuesday.

The profit growth, which was 3 percentage points lower than the first nine months, is still much faster than last year's 20.6 percent rise.

Profits made by state-owned industrial firms and firms in which the state holds a majority hit 317.5 billion yuan (US$38.2 billion) during the period, a year-on-year increase of 54 percent, the bureau said in a statement.

Industrial enterprises handed in 581.7 billion yuan (US$70.1 billion) of taxes to the state, a year-on-year increase of 18.7 percent.

During the first 10 months, sales income earned by industrial firms reached 11.12 trillion yuan (US$1.34 trillion), a year-on-year increase of 27.9 percent.

The net loss suffered by money-losing companies was 93.5 billion yuan (US$11.2 billion) during the period, a drop of 2.8 percent compared with a year ago.

Bureau spokesman Yao Jingyuan said the good performance of the industrial sector was partly due to the country's fast fixed asset investment.

China's fixed asset investment grew a year-on-year 30.2 percent to 3 trillion yuan (US$367 billion) during the first 10 months.

The performance has also been attributed to the upgrade of domestic consumption structure, the adjustment of industry structure and the price changes on the international market, said Yao, who is also the bureau's chief economist.

He said profits made by a majority of the industrial sector continued to grow during the January-October period.

Earnings of crude oil and natural gas producers rose 33.7 billion yuan (US$4.1 billion).

Profits from the transport sector, including cars, rose 26.4 billion yuan (US$3.2 billion), while earnings of ferrous metal smelters increased 26.7 billion yuan (US$3.2 billion), Yao said.

Profits of chemical raw material companies rose 15.1 billion yuan (US$1.8 billion), while earnings from electrical power producers increased 10.7 billion yuan (US$1.3 billion).

The five sectors accounted for 55.3 percent of increased profits for the whole industrial sector, Yao said.

Wang Zhao, a researcher with the State Council's Development Research Centre, said the fast growth in profits suggest the Chinese economy is developing well.

It was a result of the country's implementation of pro-active fiscal and sound monetary policies, he said.

China's gross domestic product grew 8.5 percent during the first nine months of the year compared with 2002.

(China Daily November 26, 2003)