Profits earned by China's industrial companies grew a year-on-year 43.7 percent to 425.8 billion yuan (US$51.3 billion) during the first five months of the year, according to the National Bureau of Statistics.

Profits made by State-owned industrial firms and firms in which the State holds a majority were 216.1 billion yuan (US$26 billion) during the period, a year-on-year increase of 41.7 percent, the bureau said in a statement yesterday.

Industrial enterprises handed in 340.5 billion yuan (US$41 billion) in taxes to the State, a year-on-year increase of 23.6 percent.

During the January-May period, net losses by money-losing companies were 55.6 billion yuan (US$6.7 billion) -- an increase of 0.4 percent compared with a year ago.

Niu Li, a senior economist with the State Information Center, said industrial profits continued to grow at a fast rate due to higher growth in fixed asset investment.

China's fixed asset investment growth rose a year-on-year 34.8 percent during the first five months.

"The fixed asset investment growth is still fast, even though it slowed down from the 42.8 percent rate for the first four months," Niu said.

Officials and economists have been worried that fixed-asset investment growth would heavily affect the country's economic growth.

Excessive growth in some sectors was putting a strain on transport and power suppliers, and driving up the prices of raw materials, said Yuan Gangming, an economist at the Chinese Academy of Social Sciences.

Since the second half of last year, China has taken a raft of measures to cool down the economy, including raising bank reserve requirements three times, curbing unwanted fixed asset investment projects and issuing tighter restrictions on new projects in "over-invested" industries like property and steel.

Economic data released so far for May has shown that factory output and money supplies were rising at their slowest annual pace in the past several months.

(China Daily June 23, 2004)