Economic downturn weighs on China's machinery industry

The economic downturn and a combination of adverse factors will weigh on China's machinery industry this year, eroding business profits and leading to slower export growth, an industry association said Monday.

Combined profits for the country's machinery industry are expected to grow 12 percent year-on-year this year, down from last year's 21.14-percent rise, said Cai Weici, vice president of the China Machinery Industry Federation.

The sector, which accounts for about 19 percent of the country's total industrial output, will also see a sharp retreat in export growth this year, down to 15 percent from the 24.49-percent expansion registered last year, Cai said.

He attributed the pullback to the global economic downturn, weakening demand and continuously rising costs.

The sector will also have to deal with more trade protectionism measures from China's trade partners during the downturn, he said.

The sector's industrial output rose 25.06 percent year-on-year to 16.89 trillion yuan (US$2.68 trillion) in 2011 after surging 33.93 percent in 2010. Profit growth in the sector fell to 21.14 percent in 2011 from 55.6 percent in 2010.