China’s industrial giants rebound for third successive month in July as coronavirus recovery continued
- Industrial firms saw a year on year increase of 19.6 per cent in July, accelerating from an increase of 11.5 per cent in June, the fastest pace since June 2018
- In the first seven months of the year, however, profits fell by 8.1 per cent, with May, June and July representing the only months of growth in 2020
China’s industrial giants saw their monthly profits grow for a third successive month in July, but remained negative in the first seven months of the year.
Last month, profits of industrial firms saw a year on year increase of 19.6 per cent, improving from the increase of 11.5 per cent in June, data from the National Bureau of Statistics (NBS) showed on Thursday. This was the fastest pace since June 2018 when profits grew by 20 per cent.
Total profits in for the first seven months of the year reached 3.1 trillion yuan (US$450 billion). In July alone, profits stood at 589.51 billion yuan (US$85.5 billion).
Benefiting from the acceleration of production and sales in some key industries, and the decline in overall unit costs, the profits of industrial enterprises were still recovering in July, but revenue growth has shown signs of slowing down
“Benefiting from the acceleration of production and sales in some key industries, and the decline in overall unit costs, the profits of industrial enterprises were still recovering in July, but revenue growth has shown signs of slowing down,” said Liang Zhonghua, the chief macro analyst at the research institute of Zhongtai Securities.
“The data is improving in the short term, mainly supported by real estate and infrastructure. The [growth of] infrastructure is the result of policies, and real estate is more due to the release of backlogged investment during the pandemic, which are both hard to sustain. After the backlog of demand and investment is released, the economy is still trending downward.”