China's industrial profits rise in June as Covid curbs ease

PROFITS at China's industrial firms rose last month for the first time since March as major cities like Shanghai reopened and the impact of Covid outbreaks and lockdowns on factory production, transport logistics and sales eased.

Industrial profits rose 0.8 per cent in June from a year earlier, data from the National Bureau of Statistics showed on Wednesday (Jul 27). For the first half of the year, profits were up 1 per cent.

The improvement in June profits was thanks to a continued rebound in production and sales, as well as "further recovery in industrial chains and supply chains", senior statistician Zhu Hong wrote in an accompanying statement.

While the overall figure was positive, profits for many firms are still struggling. Foreign industrial businesses saw profits drop 13.9 per cent during the January-to-June period from a year earlier, only slightly better than a decrease of 16.1 per cent recorded in the first 5 months.

Profits at private firms fell 3.3 per cent in the first half of the year, a larger margin than the decline in the January-to-May period. Profit growth at state firms, though, accelerated to 10.2 per cent, compared with 9.8 per cent growth through May.

Zhu said some enterprises are still facing difficulties in production and operation as the "external environment has become more complex and severe".

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China's economy improved in June as financial and trade hub Shanghai emerged from a crippling lockdown that began in March and as restrictions in several other cities were eased.

Industrial output rose 3.9 per cent in June from a year earlier, up from May's increase of 0.7 per cent. But slowing gains in producer prices likely dragged on profits. BLOOMBERG