BEIJING- Profits at China’s industrial firms grew for the eighth straight month in December, suggesting a sustained recovery as the manufacturing sector rapidly emerged from its COVID-19 slump.
Profits surged 20.1 percent yearon-year in December to 707.11 billion yuan ($109.40 billion), after rising 15.5 percent in November, the National Bureau of Statistics (NBS) data showed on Wednesday.
China is the only major economy in the world to avoid a contraction in 2020, with gross domestic product up 2.3 percent for the full year, while many countries remain crippled by the pandemic.
Economists polled by Reuters expect China’s GDP to rise 8.4 percent in 2021, the fastest pace in a decade. However, some analysts cautioned that a slower recovery in consumption and a potential rapid slowdown in credit growth could be risks for the Asian powerhouse.
China’s factory gate prices fell last month at their slowest pace since February, pointing to improving corporate profitability.
For the full year of 2020, annual profits for China’s industrial firms grew 4.1 percent year-on-year to 6.45 trillion yuan, recovering from a 3.3 percent on-year decline seen in 2019.
It was also quicker than a 2.4 percent gain seen in January-November.
The profit gains last year were notably driven by the manufacturing sector, which saw margins increase by 7.6 percent, said Zhu Hong, a senior statistician at the statistics bureau, in a statement published alongside the data.
China’s exports were surprisingly strong last year as factories raced to fill overseas orders amid a raging pandemic.
Liabilities at industrial firms rose 6.1 percent year-on-year at end-December, versus 6.8 percent growth as of end-November and a 5.4 percent uptick as of end-2019.
Earnings at China’s state-owned industrial firms were down 2.9 percent for 2020 year-on-year, compared with a 4.9 percent decline in January-November and 12.0 percent slump in 2019, the statistics bureau data showed.
Private sector profits grew 3.1 percent in 2020, improving from January-November’s 1.8 percent growth and stronger than 2019’s 2.2 percent rise.