Profits at industrial firms in China continued to plunge in the first three months of the year, as a pickup in factory production failed to offset a further decline in prices.
Industrial profits in the January-March period declined 21.4 percent from a year earlier, the Chinese National Bureau of Statistics said yesterday.
The drop narrowed only slightly from a fall of 22.9 percent in the first two months of this year.
Photo: AFP
Profits for last month fell 19.2 percent from a year earlier, figures showed.
“The decline in industrial companies’ profits is still relatively big, and companies’ losses are still high,” bureau statistician Sun Xiao (孫曉) said in a statement accompanying the data.
“We should continue focusing on expanding market demand, lift market confidence, improve companies’ expectations, better coordinate supply and sales, and push for industrial companies’ profits to rebound faster,” Sun said.
There were some positive signs: Automobile industry profits grew 9.1 percent last month from a year earlier, driven by recovering vehicle demand and rebounding sales, Sun said.
That reversed a 41.7 percent plunge in the January to February period.
Several consumer product manufacturing sectors also saw improvement, with the alcohol, beverage and refined tea industry recording a 39.9 percent jump in profits last month, the statement said.
Although factory activity has been improving, it has been tough for companies to pull themselves out of last year’s deep, COVID-19-induced slump.
Exports rebounded last month, largely due to resilient demand from Southeast Asia and other markets, yet the pickup in industrial output fell short of expectations.
Producer deflation has also persisted, a sign that factories are unable to boost prices, which is weighing on profits.
Foreign firms continued to lag behind other companies, but the pace of the fall in their profits is improving: a 24.9 percent fall in the first three months of this year, compared with a 35.7 percent decline in January and February.
Profits at private firms fell 23 percent in the first quarter, while those at state-owned enterprises dropped 16.9 percent.
The world’s second-largest economy is recovering at a faster pace than expected, with several economists upgrading their growth forecasts for the year after better-than-expected first-quarter data. However, the strength of the rebound is under scrutiny as the global environment remains uncertain.
Beijing is targeting economic growth of about 5 percent for the year, aided in large part by a rebound in consumer demand and stronger infrastructure investment.
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