China's industrial profits continue to rise, but recovery faces ongoing challenges
Date
8/27/2024 5:40:39 AM
(MENAFN) China's industrial sector has seen its profits rise for the fourth consecutive month in July, signaling some positive momentum for the country's manufacturing efforts. According to the National Bureau of Statistics, industrial firms experienced a 4.1 percent increase in profits compared to the same month last year, up from a 3.6 percent growth in June. Over the first seven months of 2024, industrial profits grew by 3.6 percent year-on-year, a notable improvement from the 2.3 percent decline recorded throughout 2023. Despite this upward trend, Chinese officials have cautioned that the recovery remains fragile, with domestic demand still weak and external challenges adding complexity to the economic landscape.
This latest profit data follows reports of lukewarm economic activity in July, highlighting the ongoing difficulties facing China’s economy, particularly the lingering property market downturn. While some economists remain concerned about the underlying weaknesses in China’s economic fundamentals, the growth in industrial profits suggests that Beijing's manufacturing initiatives are beginning to yield results. Notably, nearly half of China’s industrial sectors reported stronger profits in the first seven months of the year, with high-tech manufacturing emerging as a key driver of growth. The high-tech sector posted a 12.8 percent increase in profits, with the lithium battery and semiconductor industries seeing impressive gains of 45.6 percent and 16 percent, respectively, during the January-July period.
Additionally, China's equipment manufacturers saw a 6.1 percent rise in profits over the same period, while consumer goods producers reported a 10.2 percent increase, reflecting a broader recovery across various industrial sectors. State-owned industrial firms also contributed to this positive trend, with a modest 1 percent profit growth in the first seven months of the year, slightly up from the 0.3 percent increase recorded in the first half of 2024. Despite these gains, the statistics bureau emphasized that the foundation for sustained profit recovery remains unstable, underscoring the need for further consolidation of these early improvements.
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