China's industrial giants saw their profits grow for a sixth straight month in October, indicating continued recovery from the coronavirus pandemic in the world's second largest economy.
Profits at Chinese industrial firms rose 28.2 per cent in October from a year earlier to 642.91 billion yuan (US$97.8 billion), almost triple the 10.1 per cent increase in September, National Bureau of Statistics (NBS) data showed on Friday.
October's industrial profits grew at the faster pace in December 2011, when they jumped 30.5 per cent, the highest growth rate on record.
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Profits at China's industrial firms hit an all-time low of minus 34.9 per cent in March, in the midst of widespread lockdowns to control the spread of coronavirus.
From January to October, profits among big industrial companies grew 0.7 per cent on an annual basis, improving from the 2.4 per cent decline in the first nine months of the year.
Overall, the steady recovery of industrial profits has been further consolidated, and cumulative profits have achieved positive growth,
"Overall, the steady recovery of industrial profits has been further consolidated, and cumulative profits have achieved positive growth," said Zhu Hong, senior NBS statistician.
"At the same time, it should be noted that the growth rate of accounts receivable of industrial enterprises has increased, and the pressure on cash flow has risen, which is not conducive to the continuous recovery of the production and operations of enterprises."
On Thursday, China's finance ministry said profits at China's state-owned companies surged 52.5 per cent in October from a year earlier. For January-October, profits at China's state-owned firms fell 10.0 per cent year on year to 2.63 trillion yuan (US$400 billion).
After a record contraction in the first three months of the year, China's overall economy has bounced back strongly from the impact of the pandemic and crippling lockdowns early this year.
Gross domestic product grew by 4.9 per cent in the third quarter compared with a year earlier, though it undershot many analysts' expectations.
China is the only Group of 20 nation expected to see positive growth in 2020 due to its better-than-expected recovery, which has been fuelled largely by state-led infrastructure investment and a property boom.
Among industrial sectors, profits at China's manufacturing firms rose by 4.2 per cent from a year ago in January-October period, while the mining sector dropped by 34.5 per cent and the utilities sector grew by 5.9 per cent.
[The electronics sector's] contribution to industrial profit growth is particularly prominent
China's state-owned enterprises saw their profits decline by 7.5 per cent in the first 10 months of the year, while foreign and Hong Kong-Macau-Taiwan invested enterprises grew by 3.5 per cent and the private sector rose by 1.1 per cent.
In the first 10 months of the year, profits within the equipment manufacturing industry increased by 9.6 per cent from a year earlier. The growth rate was 0.8 percentage points higher than in January-September, which contributed 3.2 percentage points to the industrial profit growth and was the largest driver of growth of industrial profits.
The electronics industry has maintained double-digit growth since returning to positive profit growth in January-April, with an increase of 12.6 per cent in January-October.
"[The electronics sector's] contribution to industrial profit growth is particularly prominent." added Zhu.
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