Industrial profits suffer biggest decline in 27 months

China's industrial profits dropped by 4.2 percent year-on-year in November to 676.12 billion yuan ($109 billion), the biggest annual decline since August 2012, data from the National Bureau of Statistics (NBS) showed on Friday.

In the January-November period, industrial profits rose 5.3 percent on a yearly basis to 5.62 trillion yuan. But the growth rate is 1.4 percentage points lower than that in the first 10 months.

He Ping, an official with the NBS, said that the sales revenue generated from leading industrial enterprises' main business grew a moderate 3 percent year-on-year last month, 2.3 percentage points lower than that in October, which has led to the dropping profits.

Dropping prices of industrial goods have also eaten into the industrial profits, He said.

The central bank announced on November 21 a cut in interest rates to lower financing costs for companies.

But despite the current profits decline, the industrial sector is showing structural improvements, He said.

In the first 11 months, the profits of the mining industry fell 21.6 percent year-on-year, but the profits of consumer goods manufacturing and the high-tech manufacturing sectors grew by 6.4 percent and 17 percent respectively, much higher than the average industry profit growth.

During the first 11 months, 33 of the 41 sectors surveyed reported year-on-year profit increases, with eight sectors seeing drops.

NBS calculations cover companies with annual business revenues exceeding 20 million yuan.