China’s manufacturing economy continues to show signs of a slowdown, with seven consecutive months of sluggish year-on-year results. However, recent data indicates a downward trend in the drop. According to the National Bureau of Statistics of China, industrial profits between January and July this year decreased by 15.5% compared to the previous year. Although this is a significant decline, it is noteworthy that the reduction was narrowed by 1.3 percentage points when compared to the cumulative figures from January to June. Industrial profit is a crucial profitability indicator that surveys manufacturing companies with annual sales of at least 20 million yuan.
The National Bureau of Statistics periodically releases monthly indicators, and their recent data reveals that the total profit of target industrial enterprises fell by 6.7% in July compared to the same month the previous year. In June, there was a decrease of 8.3% compared to the previous year. These statistics highlight a concerning trend in the manufacturing sector.
Analyzing the data accumulated through July, it is evident that state-owned enterprises experienced the most significant decline, with their profits falling by 20.3% compared to the same period last year. Foreign companies, including those outside the mainland, saw a shrinkage of 12.4%, while private companies experienced a 10.7% decline. These figures suggest that multiple sectors are struggling to maintain profitability.
Sun Shao, a statistician from China’s National Bureau of Statistics, attributes the decline in profits to falling raw material prices. He believes that the pressure of these prices on the middle and downstream industries has lessened, partially due to improvements in the industrial structure.
While concerns over a potential recession loom over the Chinese economy, President Xi Jinping expressed confidence in its resilience and potential during a speech at the recent BRICS Summit. His reassurance highlights the Chinese government’s active efforts to boost economic growth and stability amid ongoing challenges.
Overall, the latest statistical data from China’s manufacturing sector paints a concerning picture of declining profits. However, it is vital to closely monitor the economic indicators and government initiatives to fully understand the trajectory and potential future implications for the world’s second-largest economy.
Reporter Joo-Dong Kim of Money Today | 2023.08.27 16:11
China’s manufacturing economy has yet to signal that it is out of a slowdown. Amidst sluggish year-on-year results for 7 consecutive months this year, however, the drop shows a downward trend.
/Photo = National Bureau of Statistics of China On the 27th, the National Bureau of Statistics of China released statistical data and announced that industrial profits between January and July this year decreased by 15.5% compared to the previous year. However, compared to the cumulative figures from January to June, the reduction was narrowed by 1.3 percentage points. Industrial profit is a profitability indicator that surveys manufacturing companies with annual sales of 20 million yuan (about 3.5 billion won) or more. It is usually released monthly. Reuters said China’s National Bureau of Statistics periodically releases monthly indicators. In this data, the National Statistics Office said that in the last month (July) alone, the total profit of the target industrial enterprises fell by 6.7% compared to the same month the previous year. In June, there was a decrease of 8.3% compared to the previous year.
Cumulatively through July, among the surveyed industrial enterprises, the profits of state-owned enterprises fell by 20.3% compared to the same period last year. Foreign companies (including those outside the mainland, such as Hong Kong) shrank by 12.4%, while private companies shrank by 10.7%.
According to Reuters, statistician Sun Shao of China’s National Bureau of Statistics said that raw material prices are falling, and the pressure of raw material prices on the middle and downstream industries (due to the industrial structure) has eased.
Meanwhile, while the Chinese economy is raising fears of a recession due to the real estate crisis, President Xi Jinping said in a speech at the BRICS Summit event on the 22nd (local time), “The Chinese economy still has strong resilience, potential tremendous and great vitality,” he said
[저작권자 @머니투데이, 무단전재 및 재배포 금지]
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