Profits of China's state-owned non-financial firms fell 3.3 percent in the first five months from a year ago, official data showed, moderating from steeper declines earlier this year. The companies made a combined profit of 923.8 billion yuan ($148.8 billion) in January-to-May, the Ministry of Finance said in a statement on its website on Friday.
Profits were down 5.7 percent in the first four months, down 8 percent in the first three and down 21.5 percent in January-to-February. The improved performance in January-to-May showed recent government policy measures to support economic growth have started "taking effect", the ministry said.
A break-down showed profits of firms owned by the central government fell 5 percent and profits of firms owned by local governments rose 2.1 percent. Companies in the transportation, electronics, chemical and power sectors reported higher profits, while coal, steel and non-ferrous metal sectors suffered losses, the ministry said without giving specifics.
But state firms in coal, steel and non-ferrous metal sectors made a combined profit of 2.7 billion yuan in May alone, jumping 254.8 percent from April. The country's three oil majors China National Petroleum Corp (CNPC), Sinopec Group and China National Offshore Oil Corp made a combined profit of 30.7 billion yuan in May, up 32.8 percent from April, the ministry said without elaborating. The central bank has cut interest rates and bank reserve requirements to lower borrowing costs and encourage more lending, while the government is stepping up fiscal spending.
China's annual economic growth slowed to a six-year-low of 7 percent in the first quarter, weighed down by a cooling property sector. Recent data showed a further loss of momentum heading into the second quarter. Annual profit growth of China's state-owned firms slowed to 3.4 percent in 2014 from 5.9 percent the previous year as factories struggled to cope with falling prices amid an economic slowdown.
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