Better demand, lower costs help fuel recovery in manufacturing sector, says NBS Profits at China's major industrial firms grew at a steady pace in
the first four months of the year as the country's economic recovery
gained further momentum, official data showed on Thursday. China's industrial firms with annual business revenue of at least 20
million yuan ($3.12 million) saw their combined profits rise 106 percent
on a yearly basis during the January to April period to 2.59 trillion
yuan, according to the National Bureau of Statistics. The figures represented an annual growth of 49.6 percent when
compared with 2019, with average growth rate in the past two years
coming in at 22.3 percent. On a monthly basis, industrial profits rose
by 57 percent in April to 768.63 billion yuan. Industrial profits for the manufacturing sector grew by 114 percent
on a yearly basis to 2.2 trillion yuan. Overall, industrial profits rose
steadily due to the improved demand and lower costs, the NBS said. According to Zhu Hong, a senior statistician at the NBS, profit
growth remained steady in most of the sectors on a yearly basis, thereby
sustaining the upward growth momentum that began since the second half
of last year. Profits in the mining sector reached 217.1 billion yuan, up 103
percent on a yearly basis. Higher prices for bulk commodities and
improved demand fueled the profit surge in the mining sector, said Zhu. Equipment manufacturing and high-tech manufacturing also saw improved
momentum, while consumer goods manufacturing continued its steady
recovery, the NBS said. Zhu said that overall, the performance of industrial enterprises
remained stable and showed quick recovery during the four-month period.
This is noteworthy, considering that the global COVID-19 situation is
still complex, the foundation for industrial economic recovery is not
yet solid and the profit growth has been uneven. Some of the consumer
industries are yet to return to the pre-pandemic profit growth levels. Zhu said that the higher bulk commodity prices increased pressure on
the production and operation of midstream and downstream industries. It
is important to ensure steady bulk commodity supplies and keep the
prices stable to consolidate the growth recovery. Zhu Jing, a senior analyst at the research department of Bank of
China, said profits of industrial firms will grow at a much faster pace
on the back of steady domestic demand, resilient external demand and the
country's existing pro-employment policies. However, operating costs
may increase for most of these enterprises and measures need to be
rolled out to monitor the market changes and increase supply and demand
of certain products.
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