China’s Industrial Profit Decline Narrows

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The decline in China’s industrial profit narrowed for the fourth straight month in June, according to official data released by the National Bureau of Statistics. The industrial profit fell 8.3% compared to the previous year in June, showing improvement from the 12.6% drop recorded in May. During the first half of the year (January-June), China’s industrial profit declined by 16.8%.

Improvement in Manufacturing Sector

The manufacturing sector played a significant role in the improved profitability of over 70% of China’s industrial sectors in the second quarter, in comparison to the first quarter. Sun Xiao, a senior statistician with the bureau, noted that profits from China’s equipment-manufacturing sector, which accounted for 34.3% of overall industrial profit, turned positive in the first half of the year with a 3.1% increase.

Positive Trends in Consumer-Goods Manufacturing

June marked an improvement in profit decline for consumer-goods manufacturing as well. Profits made by the leather-shoemaking sector witnessed a substantial jump of 107% from the previous year. Additionally, ten subsectors experienced positive profit growth in June, as opposed to five in May.

Profit Decline Varies Among Different Types of Companies

In terms of ownership, state-controlled enterprises registered a 21.0% drop in profits during the first six months of the year. On the other hand, foreign and private companies experienced declines of 12.8% and 13.5%, respectively, during the same period.

It is evident that the manufacturing sector played a crucial role in narrowing China’s industrial profit decline. The positive trends seen in both equipment-manufacturing and consumer-goods sectors indicate a promising outlook for China’s industrial profitability.

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