Chinese industry giants record highest profit growth in nine years
17. December 2020China’s major industrial companies reported rising profits in October for the sixth consecutive month. Experts see this as a further recovery of the second largest economic power from the effects of the coronavirus pandemic. In October, the profits of Chinese industrial companies increased by 28.2 percent compared to the previous year and now amount to the equivalent of 97.8 billion US dollars. This percentage increase is three times the September value of 10.1 percent. Growth in October even surpassed the previous record figure of 30.5 percent set in December 2011. The figures were presented last Friday by the Chinese National Bureau of Statistics (NBS).
In March 2020, during the nationwide lockdown in the People’s Republic, the largest industrial companies recorded a historic low of minus 34.9 percent. Nevertheless, profits grew by 0.7 percent in the period from January to October. Zhu Hong, a senior statistician of the NBS, said the figures point to a further stabilization and consolidation of economic growth. At the same time, however, he noted that receivables from industrial companies have increased and the pressure on cash flow has increased, which is not conducive to a continuous recovery of corporate production and business operations.
On Thursday the Chinese Ministry of Finance presented the results of state-owned enterprises. Their profits rose by 52.5 percent in October compared to the previous year, but at the same time suffered a 10 percent drop from January to October. After a drastic setback of the Chinese economy in the first three months of 2020, a remarkable recovery from the effects of the pandemic and the lockdown is emerging. In the third quarter, gross domestic product grew by 4.9 percent compared with the previous year, but still fell short of analysts’ expectations. China is in a group of 20 countries that expect positive growth this year. The reason for this assessment is the massive state investment in infrastructure and a boom in the real estate sector. In the industrial sector, manufacturing profits rose by 4.2 percent, mining fell by 34.5 percent and utilities grew by 5.9 percent. The electronics industry maintained its double-digit growth of 12.6 percent after returning to positive territory from January to April. All figures refer to the period January to October compared to the previous year.
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