“Chinese industrial companies had their first January-February profit decline since 2009 as slowing exports and a government campaign to cool property prices damped earnings.
Net income dropped 5.2 percent from a year earlier to 606 billion yuan ($96 billion), the National Bureau of Statistics said on its website today. That compared with a 34.3 percent gain in the first two months of 2011. The bureau didn’t release a figure for January because of a weeklong Chinese New Year holiday that disrupted production.
Today’s data may boost odds Premier Wen Jiabao adds to policy stimulus that has included two cuts since November in banks’ required reserves. A preliminary gauge of Chinese manufacturing fell in March to a four-month low, according to a report last week, sending stocks and commodities down worldwide.
The decline is “clearly alarming,” said Chang Jian, an economist at Barclays Capital in Hong Kong who formerly worked for the Hong Kong Monetary Authority and the World Bank. “More policy easing should be on the way, though at a measured pace,” she said. At the same time, the government is unlikely to reverse property-market curbs, Chang said….”
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