August 27, 2024 (InvestinChina.asia) – Industrial profits in China continued to recover in July, growing at a faster pace for the second consecutive month, according to data released by the National Bureau of Statistics (NBS) on Tuesday, August 27, 2024. The NBS reported that profits for industrial firms above a designated size rose 4.1% year-on-year in July. For the January-July period, these firms saw their total profits increase by 3.6%, up from a growth rate of 3.5% in the first half of the year.
Out of the 41 major industrial sectors tracked, more than half showed an acceleration in profit growth or a narrowing decline compared to the previous month. The NBS attributed the sustained recovery to steady market demand and improved production-sales coordination, which helped maintain stable revenue growth for industrial enterprises.
However, the NBS statistician Yu Weining noted that domestic consumer demand remains weak and the external environment is complex and volatile. This means that the foundation for the recovery of industrial profits needs further consolidation. Future efforts will focus on implementing policies to expand domestic demand and streamline economic circulation, as well as promoting new productive forces in the industrial sector.
The high-tech manufacturing industry led the growth in profits, increasing by 12.8% year-on-year in the January-July period, significantly higher than the average for all industrial sectors. This segment contributed nearly 60% to the overall growth in industrial profits.
Profit growth was also robust in several other sectors, including lithium-ion battery manufacturing, semiconductor equipment manufacturing, and smart consumer device manufacturing, which grew by 45.6%, 16.0%, and 9.2% respectively. These sectors provided key impetus for the high-quality development of the industry.
In terms of ownership, state-owned and state-controlled enterprises saw their profits rise by 1.0% year-on-year in the January-July period, while private enterprises’ profits increased by 7.3%. Foreign-invested enterprises reported a growth rate of 9.9%.
The mining industry experienced a decline in profits, down 9.5% year-on-year, while the power, heat, gas, and water supply industries saw profits grow by 20.1%.
Consumer goods manufacturing maintained double-digit profit growth, rising 10.2% in the January-July period, supported by stable domestic consumption and ongoing growth in industrial exports.
Revenues for industrial firms above the designated size grew steadily, reaching 75.93 trillion yuan in the January-July period, an increase of 2.9% year-on-year. However, the cost per hundred yuan of revenue increased slightly to 85.33 yuan.
By the end of July, the total assets of industrial firms above the designated size reached 172.76 trillion yuan, with a growth rate of 5.3%. Their asset-liability ratio stood at 57.6%, a slight decrease from the previous year.
Overall, the data indicates a resilient industrial sector in China, with notable strength in high-tech and consumer goods manufacturing, despite ongoing challenges in domestic demand and the external environment.
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