SOURCE / ECONOMY
Chinese industrial enterprises' profits in H1 2022 hit 4.27 trillion yuan, up 1% y-o-y
Manufacturing sector back on normal growth track amid supportive measures
Published: Jul 27, 2022 10:18 PM
Workers climb power lines to complete a transmission grid over the Yangtze River near Wuxi, East China's Jiangsu Province on June 13, 2022. The line allows optimized distribution across the river. In Jiangsu, industrial firms have fully resumed work, and industrial electricity use in Suzhou grew 26.5 percent year-on-year in May. Photo: cnsphoto

Workers climb power lines to complete a transmission grid over the Yangtze River near Wuxi, East China's Jiangsu Province on June 13, 2022. The line allows optimized distribution across the river. In Jiangsu, industrial firms have fully resumed work, and industrial electricity use in Suzhou grew 26.5 percent year-on-year in May. Photo: cnsphoto


As the implementation of policies and measures to stabilize the economy has deepened in the past months, solid progress in the reopening of industrial enterprises has been made. As a result, enterprises achieved marked growth in profits in June, with an improved industrial structure, government data showed.

The added value of industrial enterprises above designated size in June increased by 3.9 percent year-on-year, and their operating revenue increased by 8.6 percent, both growing for two consecutive months, according to latest figures released by the National Bureau Statistics (NBS) on Wednesday.

The profits of industrial enterprises above designated size increased by 0.8 percent year-on-year in June, reversing declines in April and May. In the first half year of 2022, profits increased by 1 percent year-on-year to reach 4.27 trillion yuan ($632.68 billion).

Analysts at the NBS pointed to the statistics as a positive sign, as the latest COVID-19 resurgence has been largely curbed. In June, industry and supply chains further recovered, and the efficiency of industrial enterprises significantly improved, said the NBS.

The regained profit growth is hard-won, which shows the resilience and vitality of China's industries. The State Council, China's cabinet, issued a package of policies and measures to stabilize the economy. Enterprises overcame difficulties, ramped up capacity and stabilized production.

Zhu Hong, a senior statistician from the NBS, noted that domestic industrial enterprises saw a rapid recovery in June as industry chains reopened, taking the revenue of domestic industrial enterprises above designated size to 65.41 trillion yuan in the first six months of 2022, up 9.1 percent year-on-year. 

The recovery of industrial enterprises' profits was jolted by the resumption of industry chains after COVID-19 flare-ups in multiple industrial centers were brought under control, Wu Chaoming, deputy head of the Chasing Research Institute, told the Global Times on Wednesday.

Demand from domestic infrastructure construction and exporters of manufactured goods also boosted the profits of relevant enterprises, said Wu.

By region, enterprises' profits in the Yangtze River Delta grew 4.6 percent in June on a yearly basis, reversing a 17.8 percent decline in May. 

Companies' profits in central and western China have kept growing, recording 14.9 percent and 23.1 percent growth in June respectively. Also, companies' profits in Northeast China have improved.

In June, benefiting from the continued recovery of industry and supply chains in the country, the profit of the equipment manufacturing industry increased by 4.1 percent, driving the profit growth of industrial enterprises.

Profits of auto manufacturing sector saw a 47.7 percent annual increase in June, helped by the work resumption in Northeast China's Jilin Province and in Shanghai along the Yangtze River Delta, two major auto manufacturing hubs in China, which played an important role in lifting overall industrial profit, according to the NBS.

A representative from Tianneng Battery Group Co told the Global Times on Wednesday that the company's major production plants are located in the Yangtze River Delta and are operating normally, noting that capacity recovered to 100 percent since June.

A staffer with the publicity department of major Chinese automaker Geely, which is based in East China's Zhejiang Province, told the Global Times on Wednesday that by June, production had fully resumed. The company was actually back to full operation before June after it took measures to beef up its supply chain resilience. 

In June, the company sold 126,595 cars, a 42 percent increase over May, owing in part to strong sales of electric vehicles, according to Geely.

However, Wu noted that the high prices of oil and other raw materials and the increased producer price index of 6.1 percent in June to some extent impacted the recovery of enterprises' profits.

Zhu also said that growth rates were still at a low level and challenges persist as the external environment has become more complex and grimmer, although the current resumption of the industry sent an upbeat signal.

To maintain growth, Zhu said that the industrial sector should continue to expand effective investment and boost consumer demand. Ministries and departments should step up efforts to cut administrative fees, and provide assistance to troubled enterprises, so as to create more favorable conditions for the sustained and steady recovery of industries.