Chinese Steel, Petchem Firms Feel Profit Squeeze

Reuters is reporting that Chinese producers of steel, chemical fibers and petrochemicals recorded falling profits in the first three months of 2006. These statistics came from the National Bureau of Statistics, which also finds that all industrial firms earned a combined 336.3 billion yuan ($41.9 billion) in profits in the first quarter, up 21.3 percent from a year earlier.

The bureau says profits rose 9.2 percent at state-owned firms, 48.5 percent at privately owned firms, and 26.9 percent at foreign firms.

Reuters also reports that some economists are skeptical of the value of the aggregate statistics because they are driven by big monopolies in sectors such as energy and telecommunications. Other analysts, though, say the figures are a useful pointer to the trend.