Consumers in the world's two largest gold markets continue to appreciate the enduring value of gold due to their rising income, high savings rate and strong economic growth, it said.
Profitable SOEs
China's state-owned enterprises (SOEs) are reaping handsome profits, drawing strength from a robust macroeconomy.
In the first 10 months of this year, the SOEs generated a combined profit of 1.626 trillion yuan ($245 billion), skyrocketing 44.8 percent from a year ago, said the Ministry of Finance (MOF).
Their revenues totaled 24.568 trillion yuan ($3.7 trillion), an increase of 33.9 percent year on year. But on a month-to-month basis, the October revenue dropped 3.7 percent from September, said the MOF.
Meanwhile, the SOEs staged an improvement in profitability as their profit-to-sales ratio stood at 6.6 percent, 0.5 percentage points higher than the previous year.
But not every industry was faring well. The ministry said several sectors suffered a decline in profits, including tobacco, real estate, electricity, coal and transportation.
The broader economy has steered a steady course of growth, providing a solid floor under corporate profitability, and offsetting the impact of costs inflation, said Xia Minren, a senior analyst with the China Securities Co. Ltd.
China's SOEs reported a record profit of 1.62 trillion yuan ($244 billion) in 2007. Nevertheless, the euphoria faded abruptly as the sweeping financial storm rippled through China. The SOE profits dropped to 1.22 trillion yuan ($183.7 billion) and 1.34 trillion yuan ($201.8 billion) in 2008 and 2009, respectively.
New Energy Campaign
Accelerating hydropower development, improving wind power performance, promoting inter-provincial trade in renewable energy and green electricity schemes could help China achieve its goal of a 15-percent reduction of its primary energy consumption through non-fossil fuels by 2020, said a recent World Bank report.
"China has achieved remarkable progress in developing renewable energy sources during the last three decades," said Ede Ijjasz, World Bank China Sector Manager for Sustainable Development.
In 2009, China's installed capacity reached 55 gigawatts of small hydropower, 22.68 gigawatts of wind power, 4 gigawatts of biomass, and 300 mw-peak of photovoltaic solar power. Consequently, China became the world's leader in small hydropower development and second only to the United States in installed wind power capacity.
To help China achieve its target in an effective manner, the report made the following recommendations:
- Developing hydropower faster. Hydropower rehabilitation could help achieve the new energy target at a lower cost because hydropower is already competitive with coal.
- Improving the performance of wind power. China's experience has been less than optimal in planning wind farms and operational integration between developers and grid operators. If not addressed adequately, the high level of inefficiencies could increase the cost to the nation of the envisaged wind program.
- Promoting trade. With trade, provinces can achieve their mandated targets. Renewable energy transactions would amount to about 360 terawatt hours, 42 percent of the total of the envisaged government target. And more importantly, trade would reduce the cost of the planned renewable energy target by about 56-72 percent.
- Developing green electricity schemes. Green electricity has been extensively studied in China and piloted in Shanghai. Deploying green electricity schemes at the national and regional levels should be considered among the options to pay for the incremental cost resulting from the development of renewable energy.
Flying High
China's aviation sector is soaring thanks to a surge in air traffic.
The industry generated a net profit of 4.92 billion yuan ($741 million) in October, more than double one year ago, said the Civil Aviation Administration of China. Of this total, domestic airlines earned 4.28 billion yuan ($644.6 million), and the airports raked in 340 million yuan ($51.2 million).
After hitting rock bottom in 2008, the aviation industry moved out of the red last year with profits totaling 12.2 billion yuan ($1.8 billion).
The demands for air traffic picked up in part due to the National Day Holiday and the Shanghai World Expo, said Li Fan, a transport analyst at the China Jianyin Investment Securities Co. Ltd.
In October, passenger volume soared 12.7 percent year on year to 24.5 million, and cargo volume surged 18.3 percent from the previous year to reach 496,400 tons.
In addition, the industry still has deep potential to explore as household income booms, making air flights affordable for more Chinese, he said. In 2009, per-capita annual air flights for Chinese residents were 0.17, well below 1.7 in the United States and Europe. |