China’s Industrial Profits Rise 3.5% in H1 Despite Faltering Economy
China's industrial profits increased by 3.6% year-on-year in June, following a 0.7% gain in May, according to official data from the National Bureau of Statistics. First-half earnings were up 3.5%, accelerating from a 3.4% increase in the January-May period. Despite a weak economy and a downshift in consumer sentiment, some sectors performed well, with optical transceiver firms Zhongji Innolight and Suzhou TFC Optical Communication forecasting multi-fold rises in first-half earnings. However, around half of more than 10 mainland-listed alcoholic beverage firms expected a loss-making first half.
China's economy missed forecasts in the second quarter due to sluggish domestic demand, job market woes, and a prolonged property downturn. To support the fragile economy, the government is implementing monetary stimulus measures, including a surprise lending operation at lower rates. Additionally, the state planner and finance ministry announced plans to arrange about 300 billion yuan ($192.66 billion) from ultra-long special treasury bonds to fund a nationwide equipment upgrade and consumer goods trade-in campaign. Despite the economic challenges, rapid industrial production growth and reduced factory-gate price declines have contributed to the stability of corporate revenue.
