China’s industrial giants see profits in October grow at fastest pace in nearly nine years
- From January to October, profits among China’s big industrial companies grew by 0.7 per cent on an annual basis
- In October alone, profits among large industrial firms increased by 28.2 per cent year on year
China’s industrial giants saw their profits grow for a sixth straight month in October, indicating continued recovery from the coronavirus pandemic in the world’s second largest economy.
October’s industrial profits grew at the faster pace in December 2011, when they jumped 30.5 per cent, the highest growth rate on record.
From January to October, profits among big industrial companies grew 0.7 per cent on an annual basis, improving from the 2.4 per cent decline in the first nine months of the year.
“Overall, the steady recovery of industrial profits has been further consolidated, and cumulative profits have achieved positive growth,” said Zhu Hong, senior NBS statistician.
“At the same time, it should be noted that the growth rate of accounts receivable of industrial enterprises has increased, and the pressure on cash flow has risen, which is not conducive to the continuous recovery of the production and operations of enterprises.”
On Thursday, China’s finance ministry said profits at China’s state-owned companies surged 52.5 per cent in October from a year earlier. For January-October, profits at China’s state-owned firms fell 10.0 per cent year on year to 2.63 trillion yuan (US$400 billion).
Among industrial sectors, profits at China’s manufacturing firms rose by 4.2 per cent from a year ago in January-October period, while the mining sector dropped by 34.5 per cent and the utilities sector grew by 5.9 per cent.
China’s state-owned enterprises saw their profits decline by 7.5 per cent in the first 10 months of the year, while foreign and Hong Kong-Macau-Taiwan invested enterprises grew by 3.5 per cent and the private sector rose by 1.1 per cent.
In the first 10 months of the year, profits within the equipment manufacturing industry increased by 9.6 per cent from a year earlier. The growth rate was 0.8 percentage points higher than in January-September, which contributed 3.2 percentage points to the industrial profit growth and was the largest driver of growth of industrial profits.
The electronics industry has maintained double-digit growth since returning to positive profit growth in January-April, with an increase of 12.6 per cent in January-October.
“[The electronics sector’s] contribution to industrial profit growth is particularly prominent.” added Zhu.