China Factory Profits Rose in June, Still Lower Than 2019
(Bloomberg) -- Profits at China’s industrial companies continued to improve in June, with returns at industrial firms growing for the second month in a row.
Profits rose 11.5% in June from a year ago, the fastest increase since late 2018, according to the National Bureau of Statistics. However, the return to growth from May hasn’t made up for the slump earlier in the year due to the coronavirus outbreak, with profits in the first half of the year still down 12.8%.
China’s economy picked up in the second quarter, with gross domestic product returning to growth after contracting in the first three months. Profit growth accelerated in the second quarter on faster production, narrowing factory deflation and lower costs, according to the NBS, but the sustainability of the rebound is “uncertain,” as Covid-19 continues to spread and international trade remains a challenge.
Profits at state owned enterprises fell 28.5% in the Jan.-June period, worse than the 8.4% drop at privately-owned businesses, the NBS said in Beijing Monday. Oil production and related sectors dragged on profit growth in the first half, while computer and telecommunications saw the fastest pace of expansion among all sectors.
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