China's industrial profits down 27.4% in first four months

BEIJING - Profits of China's major industrial firms continued to fall in the first four months of 2020, but the decline was seen to narrow amid efforts to coordinate COVID-19 containment and economic growth, official data showed Wednesday.

Profits of industrial companies with annual revenue of more than 20 million yuan ($2.8 million) totaled 1.26 trillion yuan during the January-April period, down 27.4 percent year-on-year, according to the National Bureau of Statistics (NBS).

The contraction narrowed from the 36.7-percent decline in the first quarter, NBS data showed.

In April alone, industrial profits edged down 4.3 percent, recovering from the 34.9-percent drop registered in March as production and sales rebounded amid the nationwide restoration of economic activities, NBS statistician Zhu Hong noted.

Profits at 80 percent of the industrial firms showed improvements, with more than half of them reporting profit growth last month, according to the NBS.

Automobiles, special-purpose equipment and electronics were among the sectors that saw the most visible recovery, with profits in the auto industry expanding 29.5 percent year-on-year, rebounding from the 80.4-percent slump in March.

High-tech manufacturing and strategic emerging industries also outperformed, with profit in high-tech manufacturing surging 55.7 percent last month, quickening from the 0.5-percent gain in March.

Increasing investment returns last month as well as a low comparison base last year also contributed to the improvement, Zhu added.

Despite the recovery, the business profitability situation remained "not optimistic" as yet-to-recover market demand, retreating industrial prices and cost pressure would combine to weigh on profits, Zhu stressed.

Earlier data showed China's economic activities continued to normalize as the industrial output, retail sales and investment reported across-the-board improvements, but the recovery still faces uncertainties and challenges from the global spread of the novel coronavirus.

The industrial sector was among the quickest to rebound from the impact of the virus, with the value-added industrial output returning to growth last month, the first expansion since the virus outbreak as factory activities recovered amid easing containment measures.

The value-added industrial output went up 3.9 percent year-on-year in April, rebounding from the 1.1-percent drop in March and 13.5-percent slump seen in the first two months of the year.