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QINGDAO TODAY
在线翻译:
szdaily -> Business/Markets -> 
Industrial profits swing to growth
    2019-08-28  08:53    Shenzhen Daily

PROFITS at China’s industrial firms returned to growth in July, helped by public works spending and improved margins in the petrochemical and auto sectors, but an economic slowdown and the trade tensions are expected to weigh on the business outlook.

Industrial profits rose 2.6 percent in July year on year to 512.7 billion yuan (US$72.28 billion), according to data released by the National Bureau of Statistics (NBS) yesterday, swinging from a 3.1 percent decline in June.

“The downward pressure on the economy is relatively high, the market demand is slowing down, the prices of industrial products are falling,” the statistics bureau’s senior statistician, Zhu Hong, said in a statement accompanying the data.

“There will still likely be volatility and uncertainty in profits of industrial enterprises,” Zhu said.

ING Greater China Economist Iris Pang said infrastructure spending had supported firms’ return to profit growth, particularly for electric products companies. However, persistent cash flow pressures felt by export firms and smaller businesses supported arguments for the government to do more.

She expects more central bank support, such as added liquidity and cuts to banks’ reserve requirements, which would free up the flow of credit to smaller firms.

For the January-July period, industrial firms earned profits of 3.50 trillion yuan, down 1.7 percent from a year earlier. That compared with a 2.4 percent fall in the first six months.

The uptick in July came mainly from petrochemical and auto sectors, the statistics bureau said in a separate statement on the data.

The July expansion in industrial profits contrasts with sluggish producer inflation and waning industrial output growth, which sank to record lows in July, indicating weakness in both the demand and supply sides.

The decline in the auto sector’s net profit narrowed in July, but overall car sales were down for a 13th consecutive month in July.

Profits at China’s State-owned industrial firms dropped 8.1 percent on an annual basis for the January-July period, the statistics bureau data showed.

Private sector profits rose 7 percent in the first seven months, quickening from a 6 percent growth in the first six months.(SD-Agencies)

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