Industrial profits in China fall 27.4% year-on-year to April

The profits of China's leading industrial enterprises fell by 27.4% year-on-year in the first four months of the year due to the impact of the SARS-CoV-2 coronavirus pandemic, according to the National Bureau of Statistics (NBS).

According to the ONE, profits in the January-April period were 1.25 trillion yuan (US$176.3 billion, 160.8 billion).

The indicator registered a 4.3% year-on-year reduction in April, while in March the fall was 34.9% and in January and February - for which the ONE offered a bimonthly figure -, 38.3%.

Before the stop in activity due to the pandemic, industrial profits had already presented a 6.3% year-on-year reduction in December, with a total decrease in 2019 of 3.3%.

For the elaboration of this indicator, the ONE only considers those industrial companies with annual revenues above 20 million yuan (2.79 million dollars, 2.55 million euros).

Of the 41 sectors collected by the statistics, 36 registered a reduction in their earnings in the January-April period, while the remaining five increased their profits.

Likewise, the profits of state-owned companies fell by 46% during this period, while private companies fell by 17.2%.

Among the main affected industries are oil, coal and other fuels (-213.3%), machinery and equipment repair (-66.7%), automotive (-52.1%) or textiles (-19.8%).

At the opposite extreme, the earnings of companies dedicated to tobacco (22.6%), the agricultural and processed food industry (20%) or the manufacture of electronic equipment (15%) increased.

ONE statistician Zhu Hong noted that China is making efforts to "accelerate production and sales" and said that "more and more companies are improving their situation". The expert highlighted that Chinese companies in some key sectors such as automotive or electronics are making "significant progress". "Production continues to resume, and we are already seeing the effects of the support policies that have been taken," he said.

However, "market demand has not fully recovered, the price of industrial products continues to fall and cost pressure remains high," so "the Executive must continue to implement policies that help companies and promote industrial recovery," he added.

This is one more of the economic indicators -together with international trade or manufacturing, among others- that show the great impact of the pandemic on the accounts of the Asian giant.