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State-owned trading giants registered a robust profit growth during the first quarter due to increasing imports of raw materials to maintain the country's fast economic growth.
Analysts say the strong performance indicates that these traditional players are still influential on the trade market, which has opened wider for overseas and private investors.
Sinochem International Co Ltd, Sinochem Group's listing arm in Shanghai, posted a net profit of 126.6 million yuan (US$15.31 million) in the first quarter, up about 94 per cent year on year.
Its main business profit rose to 256 million yuan (US$30.9 billion), increasing 57.6 million yuan (US$6.96 billion) compared to the same period the previous year.
The company predicted that its business will "steadily" expand due to the good macroeconomics climate, and that its half-year net profit will surge "dramatically" compared to the same period in 2003.
Sinochem Group was China's second-largest trading company in 2002.
China National Metals and Minerals Corp, the biggest metal trader in China, notched up a trade volume of US$2.6 billion from January to March.
Among these figures, import value reached US$1.364 billion, increasing 15.89 per cent year on year.
Meanwhile, the company's listing arm Minmetal Development Co Ltd predicted a net profit increase of 300 per cent year on year during the first quarter.
The brisk growth is a result of China's great demand for raw materials such as iron and steel to maintain the country's continuing economic growth, analysts pointed out.
The country registered a 9.7 gross domestic product growth and is experiencing a raw material shortage.
"Naturally, the imports of these products surged and led to the unprecedent three-months-straight trade deficit in China," said Fan Ying, a Beijing-based trade expert.
The positive first-quarter performance from these trading firms show that they are still playing a major role on the trade market, she added.
"Their brand, business network and international relations have helped withstand the initial impact of the market opening," she added.
However, the firms feel the pinch of harsher competition led by the continuous opening of the trade market.
They have found that some of their import and export business share has been taken over by newcomers.
Many of them are diversifying their business scope and gathering momentum to make an impact on other industries such as finance and manufacturing.
(China Daily April 28, 2004)
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