industrial profits

Profits of Chinese industrial enterprises grew more rapidly in July than in June, driven by high-tech manufacturers. The allocation of special treasury bonds for equipment upgrades and consumer goods trade-ins is expected to further enhance industrial profits, boosting confidence among industrial enterprises and aiding in the recovery of profits, experts said.

Profits of industrial enterprises above the designated size rose by 4.1 percent year-on-year last month, up 0.5 percentage points from the rate in June, marking the second consecutive month of profit growth, the National Bureau of Statistics (NBS) said on Tuesday. 

Profits of industrial enterprises increased by 3.6 percent year-on-year in the first seven months, up 0.1 percentage points from the first half year. 

High-tech manufacturing led the way, with the sector's profits soaring 12.8 percent year-on-year from January to July. This surge boosted overall industrial profit growth rate by 2.1 percentage points, the NBS said.

Companies involved in lithium-ion battery making, semiconductor equipment manufacturing and smart electronic devices manufacturing saw year-on-year profit increases of 45.6 percent, 16.0 percent, and 9.2 percent in the first seven months, providing important momentum for driving high-quality industrial growth, according to the NBS.

The data suggested that the effects of China's pro-growth macroeconomic policies are starting to emerge in the industrial sector, where the supply-demand relationship continues to improve, Zhou Maohua, an economist at China Everbright Bank, told the Global Times.

The high-tech equipment manufacturing sector has seen rapid growth in profits, which reflects the ongoing transformation and upgrading of China's industrial sector, Zhou said.

Industrial profits are expected to continue improving thanks to the allocation of ultra-long special treasury bonds to boost large-scale equipment renewals and consumer goods trade-ins, Wen Bin, chief economist at China Minsheng Bank, told the Global Times on Tuesday.

The move will help boost confidence among industrial enterprises, consolidate the foundation of the industrial economic recovery, and play a positive role in industrial profits' recovery, Wen said.

Yu Weining, an official of the NBS, said the profits of large industrial enterprises in China have continued to increase, but domestic demand remains weak, while the external environment is complex and volatile.

It is necessary to further expand domestic demand, take targeted measures to improve the economic cycle, implement and refine reforms, and promote the development of new quality productive forces in the industrial sector to enhance the sustained recovery of the manufacturing sector, Yu said.

A plenary meeting of the State Council earlier this month called for more efforts to expand domestic demand, with a focus on boosting consumption.