China’s industrial profits grow for fourth straight month

Shanghai

Profits at China’s industrial firms grew for the fourth straight month in August, buoyed in part by a rebound in commodities prices and equipment manufacturing, the statistics bureau said yesterday. China’s recovery has been gaining momentum as pent-up demand, government stimulus, and surprisingly resilient exports propel a rebound.

Industrial firm profits grew 19.1 percent year-on-year in August to 612.81 billion yuan ($89.8 billion), the statistics bureau said. That compares with a 19.6pc increase in July and is the fourth straight month of profit growth. However, industrial firms’ profits still face external pressures as rising tensions between Washington and Beijing cloud the global trade outlook.

Raw material manufacturing profits increased by 32.5pc in August, up from 14.7pc in July, according to Zhu Hong, an official at the statistics bureau. This was driven in part by a rebound in the prices of international commodities such as crude oil and iron ore, he added.

Meanwhile, the profits of the general equipment manufacturing sector notched up 37pc in August on-year, with electrical machinery up by 13.3pc over the same period. Economic indicators in August, ranging from exports to producer prices and factory output, all pointed to a further pickup in the industrial sector.

However, factory activity grew at a slower pace with smaller firms facing sluggish market demand and financial strains. The country has introduced a slew of measures to kickstart the economy, from tax and fee reductions to grace periods for the calling in of debt.