China's July industrial profits up, auto sector sees growth

Profits growth of China's major industrial firms continued to accelerate in July, totaling 589.5 billion yuan (about 85.56 billion U.S. dollars), up by 19.6 percent year on year, data from the National Bureau of Statistics (NBS) showed on Thursday.

Monthly profits saw growth for a third consecutive month in July as the economy continued to recover from the coronavirus-induced slump.

Notably, profit growth of the auto industry rose sharply by 125.5 percent in July following a 16.9-percent rise in the previous month, benefiting from sales rebound and increased investment return.

From January to July, the profit of major industrial enterprises saw an 8.1-percent year-on-year drop, the rate of decline narrowed by 4.7 percentage points from the January to June period.

The profit of the equipment manufacturing industry increased by 44.3 percent year on year, and the growth rate was 30.0 percentage points higher than that in June, according to the NBS.

"Multiple factors including the switch of environmental protection standards, the drive of infrastructure investment, and the increase in exports of home appliances drove the growth," NBS senior statistician Zhu Hong commented on the accelerated profit growth in the equipment manufacturing industries lead by automobile and electronics.

Profits of high-tech manufacturing have surged by 36.5 percent year on year in July, NBS data showed.

Although the profit growth of industrial enterprises further accelerated in July, Zhu cautioned about the uncertainty in future profit growth citing considerable pressure on corporate cash flow, as well as complex domestic and foreign environments.