China's industrial profits grow steadily in 2020 as market demand improves

China recorded a steady increase in major industrial profits last year as market demand improved amid sustained economic recovery, according to the National Bureau of Statistics (NBS) on Wednesday.

Photo taken on Dec. 9, 2020 shows a production line in the car body workshop of the Beijing-Hyundai Works in Cangzhou City of north China's Hebei Province. (Photo by Yuan Liwei/Xinhua)

In 2020, the profits of major industrial firms with an annual business turnover of at least 20 million yuan (about 3.09 million U.S. dollars) rose 4.1 percent year on year to more than 6.45 trillion yuan, the NBS data shows.

Hit by the COVID-19 epidemic at the beginning of last year, these firms saw their profits decline by 36.7 percent year on year in the first quarter.

But profits rebounded in the second quarter, increasing 4.8 percent year on year as companies steadily resumed work and production. Profits surged 15.9 percent and 20.8 percent in the third and fourth quarters, respectively, as economic recovery accelerated.

In December alone, the profits of these major industrial firms surged 20.1 percent year on year, registering double-digit growth for a seventh consecutive month.

Specifically, state-controlled industrial firms saw their profits drop 2.9 percent last year from one year earlier, falling to nearly 1.49 trillion yuan. Profits in the private sector grew 3.1 percent year on year to about 2.03 trillion yuan.

Profits in the mining industry sank 31.5 percent from a year earlier, while the manufacturing industry saw a 7.6 percent rise, and firms involved in the production and supply of electricity, thermal power, gas and water registered a 4.9 percent year-on-year increase.

Profits in 26 of 41 surveyed industrial sectors rose from the previous year, and 15 sectors saw their profits fall, according to the NBS.

Last year, the total revenue of major industrial firms rose 0.8 percent year on year to reach 106.14 trillion yuan, with costs per 100 yuan of revenue dropping 0.11 yuan from 2019 to 83.89 yuan.

Senior NBS statistician Zhu Hong said that while industrial enterprises have seen their production and operations recover steadily and profits continue to increase, they still face problems including rapidly growing accounts receivables, increased inventories, and relatively high cash flow pressure.