By China’s industrial profits grew at a faster clip in June, official data showed today, even as businesses were grappling with a downshift in consumers’ sentiment amid a shaky economic recovery.
A 3.6 per cent year-on-year rise in profits last month followed a 0.7 per cent gain in May, while first-half earnings were up 3.5 per cent, accelerating from a 3.4 per cent increase in the January-May period, according to the National Bureau of Statistics’ (NBS) data.
“Relatively rapid industrial production growth, coupled with a significant easing in factory-gate price declines since the second quarter, have promoted a stable recovery of corporate revenue
“Meanwhile, we should also see that insufficient domestic effective demand has constrained the continuous improvement of corporate performance, and the severe and complex international environment has increased the operating pressure of enterprises,” said NBS statistician Wei Ning in a separate statement.
The robust data contrasted with a slowing economy, which missed forecasts in the second quarter as the consumer sector was downbeat amid job market woes and a protracted housing downturn.
Roughly half of more than ten mainland-listed alcoholic beverage firms that had released forecasts for H1 earnings expected a loss-making first half.
Yet in spite of rising trade tensions with the West, optical transceiver firms Zhongji Innolight and Suzhou TFC Optical Communication forecast multi-fold rises in first-half earnings, as the two suppliers for United States chip giant Nvidia turn out to be big winners from a global artificial intelligence build-out.
China is trying to provide heavier monetary stimulus to prop up its fragile economy, surprising markets for a second time on Thursday (July 25) by conducting an unscheduled lending operation at steeply lower rates.
Only days earlier, the authorities cut several benchmark lending rates in the wake of a top leadership meeting, which had mapped out other major reforms.
The country’s state planner and finance ministry announced plans on Thursday to arrange about 300 billion yuan (RM192.6 billion) of funds from ultra-long special treasury bonds to step up a nationwide equipment upgrade and consumer goods trade-in campaign.
State-owned firms reported profits up 0.3 per cent in the first half, foreign firms recorded an 11 per cent gain, while private-sector companies booked a 6.8 per cent rise, according to a breakdown of the NBS data.
Industrial profit numbers cover firms with annual revenues of at least 20 million yuan (RM12.8 million) from their main operations.
Reuters
