China industrial profit growth quickens in September but sector divide persists
China's industrial profits grew 14.4 per cent year-on-year in September, accelerating from 4.2 per cent in August, data from the National Bureau of Statistics showed. The faster pace masks a deepening divide between export-oriented sectors and those tied to domestic demand, with profits in computer
China's industrial profits grew at a faster pace in September, though a deepening divergence across the economy continued to weigh on business earnings, data from the National Bureau of Statistics showed on Tuesday.
Profits at industrial firms rose 14.4 per cent from a year earlier last month, quickening from a 4.2 per cent increase in August. Profits were up 15.5 per cent in the first nine months, compared with a 15.7 per cent increase in the January-August period, according to the bureau.
While export-oriented firms brace for greater uncertainty as expanding trade surpluses heighten the risk of external pressures, firms tied to domestic demand continue to grapple with subdued consumption, casting a shadow over the sustainability of profit growth, the report said.
The sectoral divide remained pronounced. Profits in the computer, communication, and other electronic equipment manufacturing category soared 103.8 per cent in the first nine months, whereas the furniture manufacturing sector posted a 51.3 per cent decline, making it one of the weakest performers and highlighting the uneven nature of China's economy.
A stronger-than-expected 4.5 per cent expansion in the third quarter put China within reach of its annual growth target of 4.5 per cent to 5.0 per cent, but disparities across different parts of the economy suggest the recovery remains unbalanced, with persistent weakness in some sectors continuing to erode corporate profitability.
That pressure has become increasingly visible at the company level. Net profit at the world's largest electric vehicle battery maker, CATL, slowed sharply in the past quarter, as intense competition in the EV battery market squeezed margins at a time when China's auto sales were in a downturn.
Industrial profit figures cover firms with yearly revenue of at least 20 million yuan (US$3.0 million) from main operations.