Business & Economy

China’s industrial profits fall 36.7 percent year-on year in first quarter

Beijing, Apr 27 (efe-epa).- Profits of China’s leading industrial businesses dropped 36.7 percent year-on-year in the first quarter of 2020 due to the impact of the coronavirus pandemic.

The data released by the National Bureau of Statistics on Monday revealed that the profits in the first quarter of the year were placed at 781.45 billion yuan ($110.43 billion).

The marker recorded a 38.3 percent year-on-year fall in the months of January and February, while the slump in March stood at 34.9 percent, according to NBS.

Before the suspension of the activities due to the pandemic, the industrial profits had shown a 6.3 percent year-on-year decline in December with a total drop of 3.3 percent in 2019.

To compile these figures, the NBS takes into account only those industrial firms which have annual revenue of more than 20 million Yuan.

Of the 41 sectors listed by the NBS, 39 recorded a slump in their profits in the first quarter of 2020 while the remaining experienced an increase.

Likewise, the gains of state-run firms declined 45.5 percent during this period, while that private entities slumped 29.5 percent.

Most affected firms included those of oil, coal and other fuel industries (-187 percent), machine and equipment repair industries (-84.3 percent), automation (-80.2 percent), chemical industry (-56.5 percent), textile (38.8 percent), food manufacturing (27.4 percent) and pharmaceutical industries (-15.7 percent).

At the other extreme, tobacco and agricultural and processed food industries recorded gains of 28.5 percent and 11.2 percent, respectively.

NBS expert Zhang Weihua said that resumption in production is accelerating and corporate profits have been showing some positive changes given that 28 of the 41 companies analyzed in March showed improvement in their figures as compared to that of the first two Months of 2020.

He said that the profits of the electronic sectors and food manufacturing companies had turned positive from negative while the other sectors such as chemical industry recorded a drop in profits lesser than the period of January and February.

However, the expert added that the demand had not recovered completely yet and the price of the industrial products had plunged.

Zhang said that the drop in the profits of the firms was even steeper and situation far from optimistic and further added that policies and measures to promote economic and social development to aid the companies to overcome the difficulties should continue to be in place.

The data released on Monday is one of the economic indicators – along with international trade and production, among others – that show the significant impact of the pandemic on the figures of the Asian country. EFE-EPA

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