Beijing: The profits of China’s major industrial companies dropped by 19.3 per cent year on year between January and May this year due to the impact of the COVID-19 pandemic, the National Bureau of Statistics (NBS) said.
According to the NBS, industrial profits stood at 1.84 trillion yuan ($260 billion) for the first five months of the year.
The figure is less than the projections offered by analysts, who had predicted a 22 per cent fall in profits during this period.
The indicator is based on the results of industrial firms with annual revenues above 20 million yuan.
Of the 41 industrial sectors surveyed by the NBS, 30 registered a drop in profits between January and May, one managed to retain the same profit while 10 witnessed their earnings rise.
Similarly, the profits of state companies fell by 39.3 per cent during the period, while the losses for private companies were smaller, with an 11 per cent drop.
The worst-hit sectors include oil, coal, and other fuels (-167.4 per cent), professional mining and auxiliary activities (-156.8 per cent), automobile (-33.5 per cent) and textile (-10.3 per cent).
On the other end of the spectrum, profits rose for companies producing electronic equipment (34.7 per cent), tobacco (28.1 per cent), and the agricultural and food processing industry (19 per cent).
NBS statistician Zhu Hong said the efficiency of major industrial firms continued to rise as the “restoration of work and production processes,” after a sudden halt in activities due to Covid-19 outbreak in the first few months of the year.
Although the expert admitted that the general scenario still amounted to a major decline with the 19.3 per cent fall in profits within the first five months of the year.
He said that the recovery in profits mainly registered in May was due to factors such as eased pressure on costs, prices, changes of industrial products, and the profit improvement in key industries such as petroleum processing, electricity, and steel.
Industrial profit is the latest in a series of economic indicators – such as international trade and manufacturing – that have demonstrated a major impact of the coronavirus pandemic on the Chinese economy.