[1/2]Robotic arms assemble cars on the production line for Leapmotor’s electric vehicles at a factory in Jinhua, Zhejiang province, China, April 26, 2023. China Daily acquires license rights via Portal/File Photo
BEIJING, Oct 27 (Portal) – Profits at Chinese industrial companies rose for a second month in September, adding to signs of a stabilizing economy as authorities rolled out a series of supportive policy measures.
The 11.9% year-on-year increase was driven by a surprise 17.2% rise in August and follows stronger-than-expected industrial and consumer activity in September.
Profits fell 9% in the first nine months compared to a year earlier, down from an 11.7% decline in the first eight months, data from the National Bureau of Statistics (NBS) showed on Friday.
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Industrial profits rebounded quarter on quarter, posting growth of 7.7% in the July-September period after declining in the previous two quarters, NBS statistician Yu Weining said in an accompanying statement.
The September figure reflected an overall improvement in activities in the domestic industrial sector and a continued recovery in market demand, said Zhou Maohua, an analyst at China Everbright Bank, adding that the slowdown in annual growth was due to a high base last year .
A decline in producer prices last month suggested that some industrial companies were still cutting prices to promote sales, which had a negative impact on overall industry sales and profits, Zhou said.
He added that the improvement in industrial profits will continue in the coming months, partly due to the lagging effect in the domestic economic stimulus.
China’s blue-chip CSI300 index (.CSI300) rose 0.6% after opening negative in the morning.
A series of recent data points to a stabilization in the world’s second-largest economy, which grew faster than expected in the third quarter after quickly losing momentum following a brief rebound following the COVID crisis.
Analysts attribute the stabilization to a series of policy measures taken in recent months. However, ongoing weakness in the crisis-hit real estate sector remains a major drag on the economy and corporate profits.
Last week, Chinese battery giant CATL (300750.SZ) reported a sharp slowdown in third-quarter profit growth, its weakest quarter since early last year, amid slowing demand and strong competition.
In his first policy remarks after third-quarter gross domestic product data, China’s central bank governor Pan Gongsheng pledged to boost the economic recovery with an emphasis on expanding domestic demand while containing financial risks.
According to a breakdown of NBS data, state-owned companies reported an 11.5% decline in profits in the first nine months, foreign companies recorded a 10.5% decline and private sector companies recorded a 3.2% decline.
The industrial profit figures include companies with annual sales of at least 20 million yuan ($2.73 million) from their main business.
($1 = 7.3150 Chinese Yuan)
Reporting by Qiaoyi Li and Ryan Woo; Editing by Jacqueline Wong
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