( Beijing, 27th July 2020 ) Thanks to the steady recovery of production and operation, the narrowing of PPI decline, and the gradual effectiveness of domestic underpinning policies, China's industrial corporate profits increased for two consecutive months in June, and the year-on-year growth rate rose to the highest in more than a year .
The National Bureau of Statistics of China announced on Monday that the total profit of industrial enterprises above designated size in June was 666.55 billion yuan, an increase of 11.5% year-on-year. The growth rate was 5.5% faster than that in May, and was the highest in a single month in more than a year; from January to June The total profit was RMB 2511.4 billion, a year-on-year decrease of 12.8%, and the rate of decline narrowed by 6.5 percentage points from January to May.
Among them, the profitability of key industries such as steel and nonferrous metals has improved significantly, indicating that China's industrial economy has returned to a normal track and the supply side has been basically restored.
However, analysts pointed out that there are still some companies that have not completely escaped the impact of the epidemic. Considering that the floods in the southern region may drag industrial production, the epidemic and the uncertainty of the external environment, etc., it is expected that the profit of industrial enterprises will increase in the future. .
"Pre-recovery" Counter - Cyclical
In the second half of the year, macroeconomic policies will shift from the countercyclical phase of the "late recession" to the countercyclical phase of the "early recovery", and will be more biased towards the release of domestic demand. Monetary policy needs to maintain a moderate total amount. In response to the imbalance in the recovery of the industrial sector, more Adopt more innovative structural policies and precise drip irrigation.
Zhou Maohua, an analyst at the Financial Markets Department of Everbright Bank, said: “From a trend perspective, China’s domestic demand stabilization and internal circulation promotion policy effects in the second half of the year, the global unblocking and resumption of production are expected to continue, and the large-scale stimulus policies of major economies around the world are expected to be released. The upturn continues to benefit the performance of China’s industrial manufacturing sector."
In addition, Zhu Hong, a senior statistician in the Department of Industry of the National Bureau of Statistics, interpreted that the profit growth rate of industrial enterprises in the first half of the year showed a trend of "low in the beginning and high in the latter, from falling to rising". Although the profitability of industrial enterprises in the second quarter has clearly recovered to improve, overall, due to the impact of the new crown pneumonia epidemic, market demand is still weak, enterprise production and operation still face many difficulties, and the profit growth structure needs to be further improved.
**Info & Image are taken online
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