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October 28, 2020

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Industrial firms record 10% growth

Source: Xinhua/Shanghai Daily | 00:00 UTC+8 October 28, 2020 | Print Edition

PROFITS of China’s major industrial firms maintained an upward momentum in September as production demands have gradually warmed up amid solid efforts to contain COVID-19 and bolster economic development, official data showed yesterday.

Profits of the country’s major industrial firms totaled 646.43 billion yuan (US$96.5 billion) in September, increasing by 10.1 percent year on year, data from the National Bureau of Statistics showed. This marked the fifth month of profit growth, albeit 9 percentage points slower than August’s increase.

“The slower growth in September was mainly attributed to the deepening declines in producer prices, rising losses from asset depreciation and increasing raw material costs for auto and electronics sectors,” said NBS senior statistician Zhu Hong.

However, China’s industrial output rose by 6.9 percent in September from August’s 5.6 percent growth, which indicates sustained recovery.

Despite pressure from the COVID-19 epidemic as well as the grim and complex domestic and international environment, China’s industrial companies saw a steady recovery in their profits as supply and demand further improved, Zhu said.

In the third quarter, profits in the industrial sector rose 15.9 percent year on year, widening by 11.1 percentage points from that in the second quarter. A total of 31 of the 41 surveyed industrial sectors reported profit growth in the period, with 24 sectors registering a double-digit increase.

Industrial profit data released by the NBS covers large firms with annual turnover of at least 20 million yuan.

Auto manufacturing, nonferrous metal smelting and rolling, and general-purpose equipment manufacturing were among the sectors that saw the most prominent recovery, with profits in the auto industry expanding 53.8 percent year on year, extending the 26 percent increase in the second quarter.

Zhu attributed the growth to policy support in advancing infrastructure construction and boosting consumption, as well as warming investment and increasing consumer demands.

Meanwhile, the raw material manufacturing industry reversed the downward trend by gaining 23 percent year on year in the third quarter, data showed.

Despite the recovery, industrial enterprises still face pressure in maintaining profit growth as revenue and profit growth in the first nine months remained in the negative territory, Zhu said, citing the 2.4 percent contraction of the industrial profits during the period. It narrowed a 4.4 percent decrease in the first eight.

To propel continuous improvements of the industrial economy, Zhu called for more efforts to stimulate the vitality of market entities and help enterprises solve difficulties in production and operation.

Profits of industrial firms may experience fluctuations in the next few months, but the adaptability of domestic enterprises remains relatively strong.

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