China’s industrial profit growth has intensified, signs of strong economic recovery – tech2.org

China’s industrial profit growth has intensified, signs of strong economic recovery


BEIJING (Reuters) – The profits of China’s industrial firms have increased for a second straight month and at the fastest pace in a year, the country is showing signs of economic recovery from the coronovirus crisis.

FILE PHOTO: On September 2, 2019, in Hangzhou, Zhejiang Province, China, a worker welcomed a bicycle making sports equipment in a factory. REUTERS / File Photo

The Bureau of Statistics said on Monday that China’s industrial firms’ profits rose 11.5% year-on-year to 666.55 billion yuan ($ 95.27 billion) in June, the fastest profit growth since March 2019.

Prior to the onset of the coronavirus epidemic, the sector’s first monthly increase in May earnings since November could be marked.

For January-June, industrial firms’ profits fell 12.8% year-on-year to 2.51 trillion yuan, but it was easy to dive 19.3% in the first five months.

After a record decline at the beginning of the year, China’s economy rebounded more than expected in the second quarter as virus lockdown measures ended and policymakers increased stimulus. But analysts warn that the rebound is heavily dependent on state-led investment, while domestic and global demand remains weak.

Zhu Hong, a Bureau of Statistics official, said in a statement that steel, oil and gas extraction, oil refining and non-ferrous metals saw significant improvements in profits, with manufacturing costs improving and demand improving in June.

But Zhu warned about the outlook as market demand remains weak amid the effects of the COVID-19 pandemic and the international trade situation is “complex and severe”, so uncertainties remain over the stability of profit growth.

Major manufacturers of raw pharmaceutical components and medical equipment, including Zhejiang Nhu (002001.SZ) And Zhejiang Yuyue (002223.SZ), Stated that they expect strong gains for the first six months on better sales.

All things ranging from factory surveys to producer prices have indicated a further pick-up in manufacturing, but analysts say that as time progresses in factories, demand increases, export struggles and heavy flooding Construction and other economic activities may be disrupted. Yangtze Delta.

Increasing inventory and sluggish demand can also lead to profit margins.

According to the data, China’s state-owned industrial companies reported earnings down 28.5% in the first six months, following a 39.3% drop in January-May, according to Bureau data.

Liabilities on industrial companies grew by 6.4% on an annual basis at the end of June, compared to an increase of 6.6% at the end of May.

Private sector profits fell 8.4% in January-June, down from 11.0% in January-May.

Industrial profit data includes large companies with annual revenues in excess of 20 million yuan from their core operations.

Reporting by Gabriel Crossley and Roxanne Liu; Editing by Kim Koghil and Mr. Navratnam

Our standard:Thomson Reuters Trust Theory.

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