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China industrial profits grow for fourth consecutive month

Industrial profits in China post growth for the fourth consecutive month

On Sunday, China announced that the profits of industrial companies rose for a fourth consecutive month in August, after finding support from the recovery in commodity prices and manufacturing equipment.

The profit index of industrial companies in China rose in August by 19.1% at the annual level, to reach 612.81 billion yuan (89.8 billion dollars).  This compares with an increase of 19.6% in July.

Growth gained momentum from deferred demand from companies and the household sector due to the Corona crisis, along with government incentives and resilient exports that helped the recovery.

But in general, the profits of industrial companies in China are facing pressure due to the current tensions between China and the United States as well as the weakness of global trade that has been trying to recover since the Corona crisis.

The economic indicators in August, which ranged between exports, producer prices and factory production, indicated another recovery in the industrial sector.  However, the industrial sector recorded growth at a slower pace as small businesses faced slowing market demand and financial pressures.

It is worth noting that the profits of industrial companies in China from January to August decreased by 4.4% to reach 3.72 trillion yuan, better than the period from the beginning of the year to July, which witnessed a decrease of 8.1%.

While profits in state-owned industrial companies fell by 17% year-on-year for the first eight months of the year, compared to a drop of 23.5% in the first seven months.

Private sector profits fell 3.3% in the January-August period, down from a 5.3% decline in the January-July period.

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