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Chinese industrials firms post double-digit profits

The economic rebound is expected to continue.

The Chinese industrial firms have reported profits of 895.2bn Chinese renminbi in December 2012, a growth of 17.3 per cent compared to same period a year ago, marking the third month of double-digit growth.

Profits of industrial companies owned or controlled by the Chinese government, declined for in 2012 by 5.1 per cent to 1.42tn renminbi.

Stephen Green, head of research for Greater China at Standard Chartered bank, told the Financial Times: “We expect industrial profits to rise 30 per cent in 2013 on average. We expect year-on-year profit growth to peak in the third quarter.”

Green said surging investment in infrastructure and real estate, a mild rebound in export demand from China, cheaper raw materials, looser monetary conditions and a lower base in 2012 will all support faster profit growth this year.

The world’s second-largest economy saw an economic growth of 7.8 per cent in 2012.

In its survey of 41 sectors, the National Bureau of Statistics in China, saw rise in profits among 29. However, steel and chemical companies saw decline in profit of 37 per cent and 6 per cent in 2012 compared to a year ago.

Sector wise, profits of power generation firms grew 69 per cent, while food processing companies saw a profit growth of nearly 21 per cent, and electrical equipment makers profits grew 8 per cent.

Meanwhile, private sector total realised profits rose 20 per cent from a year earlier to 1.82tn renminbi.

Lou Jiwei, head of China’s main sovereign wealth fund, told a forum that growth was likely to exceed 8 per cent this year and would be a key support for global demand amid a “mild, tortuous and slow recovery” in the world economy.

The world’s second-largest economy has taken proactive steps to improve investment and infrastructure by liberalising its monetary policy in 2012.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.