China’s industrial profits rise for first time since March as coronavirus curbs ease, but concerns remain
- Profits at China’s industrial firms rose by 0.8 per cent in June from a year earlier, while for the first half of the year, profits were up by 1 per cent
- But while the overall figure was positive, profits for many firms are still struggling, with foreign industrial businesses down by 13.9 per cent in the first six months of the year
Profits at China’s industrial firms bounced back to growth in June after two months of declines, underpinned by the resumption of activity in major manufacturing hubs, but fears of a coronavirus resurgence have cast a shadow over future factory output.
Profits in June grew by 0.8 per cent from a year earlier, rebounding from a 6.5 per cent decline in May, National Bureau of Statistics (NBS) data showed on Wednesday.
Buoyed by easing pandemic curbs and government stimulus, June’s data shows industrial firms are gradually coming back from painful supply chain disruptions in the second quarter.
The recovery in profit growth was driven by a pickup in demand, said Zhou Maohua, an analyst at China Everbright Bank, adding it led to strong profit growth in the upstream sector.
Profitability in the middle and downstream manufacturing sectors, as well as producers of electricity, heat, gas and water, also improved, he said.