China's machinery industry made a profit of 127.6 billion yuan in the first six months of the year, up 44 percent year on year.

Government support, market demand and strong incentives for investment contributed to the rise, said Cai Weici, vice president of the China Machinery Industry Federation (CMIF).

CMIF statistics show China exported 65.2 billion U.S. dollars worth of machine tools in the first half of this year, up 36.15 percent year on year. Booming exports reduced the trade deficit in the machinery sector by 5.6 billion U.S. dollars to 1 billion U.S. dollars.

Despite the profit gains, the machinery industry faces a slow down in the second half of the year as raw materials prices rise and fixed asset investment surges.

Sharp rise in fixed asset investment may cause surplus productivity which would make days hard for the whole industry, Cai said.

Cai also warned the industry of tighter macro-economic control in the second half as the central government may take more measures to stabilize the economy.

He predicted the machinery industry would slow slightly in the second half, but it would still see an annual increase of approximately 20 percent in both sales and profits. (1 dollar= 7.97 yuan)

Source: Xinhua