Industrial profits in China rose at the fastest pace during the month of June, buoyed by strong support from government spending in the corporate sector though uneven growth and soft investment pose risks in the near term.
China’s industrial profits rose 5.1 percent to 616.31 billion yuan (USD92.40 billion), showing the fastest growth since March, data released by the National Bureau of Statistics (NBS) showed Wednesday. Total profits for the first half stood at 3.0 trillion yuan, up 6.2 percent from the same period a year ago and compared with a 6.4 percent gain in the January to May period.
"The bottom line is that the worst has gone in terms of industrial profits," said Raymond Yeung, Economist, ANZ, Hong Kong.
Yeung mentioned that the recent improvement in China’s upstream prices, noticed in the slight moderation of the producer price index, points to a pickup in profits in the second half of the year. Moreover, an official at the NBS said that June profits accelerated from May but unfavorable conditions for companies continue to exist in the medium term, reports said.
Meanwhile, the official also added that the rise in profits is spread unevenly across all sectors, with gains in profits conglomerated within a few industries including electronics, steel and oil processing.
