Coronavirus: China’s industrial firms’ profits plummeted almost 40 per cent at start of 2020
- Profits plummeted 38.3 per cent from a year ago in the first two months of 2020 to 410.7 billion yuan (US$56 million)
- A total of 37 out of the 41 industrial divisions witnessed a decline with China as virus containment measures weighed on the economy
Profits at China’s industrial firms plummeted 38.3 per cent from a year ago in the first two months of 2020, with the biggest loss on record offering fresh evidence of the overwhelming impact of the coronavirus on the world’s second largest economy.
Earnings for large companies with annual revenue of more than 20 million yuan from their main operations tumbled to 410.7 billion yuan (US$56 million) for January and February, according to data released by the National Bureau of Statistics on Friday.
The drop was larger than the 37.3 per cent contraction in the first two months of 2009 amid the global financial crisis, at a time when China had just rolled out its 4 trillion yuan (US$586 billion) stimulus package.
A total of 37 out of the 41 industrial divisions witnessed a decline, with only the tobacco, non-ferrous metal smelting and rolling, oil and gas extraction and food processing sectors showing an increase.
The overseas epidemic is still growing … the global synchronised economic downturn is hard to change
Liang Zhonghua, chief macro analyst at the research institute of Zhongtai Securities, said China's economic growth rate in the first quarter of 2020 is expected to be negative as economic activities have not returned to normal, especially in catering and tourism.
“The overseas epidemic is still growing … the global synchronised economic downturn is hard to change,” he added.