Exports boost China’s industrial profits in first half, but recovery still looks patchy

Industrial enterprises post year-on-year profit growth of 3.5 per cent, but subsidies, overcapacity and weak demand could complicate picture

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Foreign trade has emerged as the single pillar buttressing profit growth of Chinese companies in the first half of the year. Photo: Xinhua

Published: 8:00pm, 27 Jul 2024Updated: 8:53pm, 27 Jul 2024

China’s industrial profits rose in the first six months compared with a year earlier, as robust exports continued to buoy earnings.

However, analysts said subsidies, overcapacity, export uncertainties and weak consumer demand could complicate the conditions for continued recovery for the rest of the year.

Total profits of industrial enterprises rose 3.5 per cent year on year to 3.51 trillion yuan (US$485 billion) in the first half, the National Bureau of Statistics (NBS) said on Saturday.

The pace, while slower than the 4.3 per cent growth in the first quarter, still marked a sharp rebound from the 2.3 per cent slump recorded in 2023.

The profits upswing might back up Beijing’s claim that annual GDP growth of around 5 per cent was still attainable, after the 4.7 per cent posted in the second quarter fuelled fears that the world’s No 2 economy could undershoot the ambitious goal.

Beijing vowed resolve and resources to achieve the 2024 target in the communique from the third plenum of the Communist Party’s Central Committee, which was held last week.