China’s industrial giants see profit growth for fourth straight month in August, but still down in 2020
- Industrial profits at China’s biggest firms declined by 4.4 per cent in first eight months, compared with the same period last year
- Stable recovery of production and demand is due in large part to the rapid recovery of profits in equipment manufacturing, electrical machinery and raw material sectors
China’s industrial giants saw their monthly profits grow for a fourth consecutive month in August, while remaining negative over the first eight months of the year.
In the first eight months of the year, industrial profits at China’s biggest firms fell by 4.4 per cent year on year, with May, June, July and August representing the only months of growth so far in 2020. In August alone, profits stood at 612.81 billion yuan (US$89.8 billion).
Total profits in for the first eight months of the year reached 3.716 trillion yuan (US$544.5 billion), with state-owned enterprises seeing a year-on-year decrease of 17 per cent to 950.94 billion yuan, foreign-invested enterprises (including Hong Kong, Macau and Taiwan-funded ones) registering a decrease of 0.4 per cent to 1.038 trillion yuan, and private enterprises seeing a decrease of 3.3 per cent to 1.069 trillion yuan.
It remains a stable recovery of production and demand, thanks to a rapid recovery of profits in equipment manufacturing, electrical machinery and raw material manufacturing sectors, the NBS said.
Last month, profits within the equipment manufacturing industry increased by 23.1 per cent from a year earlier, while the auto industry rate rose 55.8 per cent after a 125.5 per cent increase in July.
In the first eight months of the year, 16 of the 41 industrial sectors saw profits rise year on year. Total profits within the computer, communications and other electronic equipment manufacturing industry increased by 26.1 per cent, but profits involving support activities for mining dropped 38.1 per cent from a year earlier, and profits within the manufacturing sector dropped 1 per cent.
China’s economic recovery from the impact of the coronavirus remains patchy after industrial production grew by 5.6 per cent in August from a year earlier, while retail sales grew by 0.5 per cent – the first increase this year.