PROFITS at China’s big industrial firms extended gains for a third month in October, adding to signs of a stabilizing economy following a run of mostly upbeat data suggesting China’s support measures have helped bolster a tentative comeback.

Industrial profits rose 2.7% from a year earlier in October, the National Bureau of Statistics said yesterday.

October’s rise came on the back of an 11.9% gain in September and a 17.2% increase in August, and follows stronger-than-expected industrial and consumption activity over October.

In the first 10 months of the year, China’s industrial profit fell 7.8% year on year, narrowing from a 9% decline in the first nine months, said the statistics bureau.

Revenues accumulated by industrial companies recorded growth for the first time so far this year, rising 0.3% year on year in the January to October period, after staying flat in the first three quarters.

The statistics bureau said state, private and foreign industrial companies reported improved profitability in October due to the government’s policies to help businesses.

The world’s second-largest economy has sought to mount a strong post-COVID recovery as distress in the housing market, local government debt risks, slow global growth and geopolitical tensions dented momentum.

“Three consecutive months of positive profit growth suggest that the worst times, when profitability was squeezed by high input costs, overcapacity and soft demand, are over,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.

“However, the volatility of profits is a sign enterprises remain highly sensitive to input costs,” he added. “The sharp slowdown of year-on-year profit growth was partly driven by a rebound in energy prices.”

LONGi Green Energy Technology Co., a major domestic solar energy manufacturer, saw its third quarter net profit plummet 44.1% to 2.5 billion yuan (US$346.7 million), hit by macroeconomic headwinds and a supply glut.

China’s industrial output grew 4.6% in October, compared with the same period a year earlier, although analysts say a full-blown recovery remains some time away, even if the economy did grow faster-than-expected in the third quarter. (SD-Agencies)