ACCOUNT PROFILE

China industrial sectors’ 2020 gross profits up 4.1%

Posted on 28 January 2021

For 2020, China’s sizeable industrial enterprises posted a 4.1% on-year increase in their total gross profits to Yuan 6.45 trillion ($1 trillion), with telecommunication, computer, and other electronics manufacturers and automakers being the top two contributors of the total profits, according to the latest sharing by the country’s National Bureau of Statistics (NBS) on January 27.

The detailed breakdown by quarter showed that the enterprises under the survey posted profitmaking starting the second quarter of 2020, and the pace quickened in the third and fourth quarters, with the on-year increases posting at 15.9% and 20.8% respectively, and as for the monthly performance, May was the turning point for the industrial enterprises to return to profitmaking from losses, NBS elaborated.

For the whole 2020, China’s 26 industrial sectors of the 41 under the NBS’ monitoring posted profitmaking and 15 sectors saw their profits gain by two digits on year. As for the lossmaking enterprises, the proportion against the all in the 41 sectors reduced by 17.5 percent points from March to 17.3%, according the bureau.

The telecommunication, computer, and other electronics manufacturers posted their total gross profits at about Yuan 592 billion, or up 17.2%, and for the automakers, the second largest contributor, their profits approximated Yuan 509.4 billion, or up 4% on year, according the NBS data.

For raw material producers, their gross profits gained 4.5% on year for the whole 2020 though their profits until November still dropped 1.7% on year, indicating the substantial recovery in the latter half and especially December for the enterprises in the sectors such as oil refineries, steel mills, chemical and petrochemical plants.

For the oil refinery plants and steel producers, though, their gross profits still reduced by 26.5% and 7.5% on year respectively for the whole 2020, though the former’s narrowed substantially by 39.7 percentage points from the first three quarters and the latter 11.2 percent points less than that over January-September, indicating that the overall improvement in the October-December quarter, NBS highlighted.

By the ownership of the enterprises, privately-owned firms managed to post a 3.1% on-year rise in their gross profits against the 0.5% on-year decline until September, mainly thanks to the consistent preferential government policies including fee and taxation cuts, and rental and interest rates reduction, NBS explained.

Source : Mysteel Global