A worker debugs a special robot at a workshop in the Tangshan Hi-tech Industrial Development Zone in Tangshan, north China's Hebei Province, July 17, 2020.(Photo: Xinhua)

China's industrial performance has continued its recovery momentum, even though industrial profits edged down, the National Bureau of Statistics (NBS) said over the weekend. Analysts pointed out that the decline of industrial profits is a result of multiple factors as demand was dragged down by sporadic COVID-19 outbreaks and power shortages due to heatwaves that impacted production.

Profits of China's major industrial firms fell 1.1 percent year-on-year to 4.89 trillion yuan ($712 billion) in the first seven months of 2022, data from the National Bureau of Statistics (NBS) showed on Saturday.

Revenues of China's major industrial firms grew 8.8 percent year-on-year to 76.57 trillion yuan in January to July, NBS data showed. 

NBS senior statistician Zhu Hong highlighted the recovery of the equipment manufacturing industry and the uptick of industrial profits of the automobile manufacturing sector, as supply and production chains are resuming, and pro-consumption policies such as the car purchase tax cuts are taking effect. 

A total of 16 out of 41 major industries saw growth in profits in the January-July period, and 14 of them reported growth of over 5 percent.

China's industrial profits have seen recovery in June from the impact of the previous epidemic, and the decline in July was partly due to seasonal factors, Tian Yun, a Beijing-based economist told the Global Times.

In July, the extreme high temperature weather in many regions across China caused electricity supply shortage to manufacturing. 

The electricity, heat, gas and water production and supply industry realized a total profit of 275.12 billion yuan, down 12.5 percent year-on-year in the first seven months, NBS data showed.

The manufacturing industry realized a total profit of 3,621.72 billion yuan, down 12.6 percent during the same period, NBS data showed.

The epidemic had a severe impact on the economy in the second quarter, but under epidemic prevention measures, the impact is waning, Tian said, adding that industries such as automobile manufacturing have actually recovered significantly in July compared with June.

China's export growth unexpectedly picked up speed in July with an 18-percent growth, according to customs data. Chinese automakers exported 290,000 vehicles in July, achieving a new record with 67 percent year-on-year growth, according to data from the China Association of Automobile Manufacturers. 

Real estate-related industries are indeed facing challenges, but profits of new energy supply equipment and chips are expected to maintain growth in the second half of the year, Tian said.

Global Times