Employees are working on photovoltaic cells, used in solar panels, at a factory producing export units to the United States and Europe, in Lianyungang, in the East Chinese province of Jiangsu on September 26, 2025.
AFP | Gety pictures
Industrial profits in China increased in August, where Beijing has advanced forward efforts to curb the severed price wars in supply and reduction, as analysts said that the rationalization of production would flow to the next five -year plan.
Industrial profits increased by 20.4 % in August of the previous year, reflecting three months of successive decline, according to the data issued by the National Bureau of Statistics on Saturday.
This sharp recovery also represents the largest jump since November 2023, when profits increased by 29.5 % on an annual basis, as a large group of measures supporting growth on the recovery kit helped after birth Promote the manufacturing sector.
The Chinese authorities attributed the strong recovery in the profitability of companies to the policies of the macroeconomic economy as well as the influence of last August base – when profitability decreased with double numbers – which prompted Beijing to launch a large number of stimulus measures at the end of September last year.
Beijing’s efforts aim to reduce the fierce price competition in the industrial sectors, at a time when the contraction in the prices of producers is in its third year, Help reduce the low prices in August To the slower in four months.
“The recovery of the product price index has shown thanks to the anti -revolutionary China batch that it led to the marginal improvement of profit,” said Tommy Shi, head of Macro -Asia Research at OCBC.
The decreases in the prices of producers in industrial growth in the country came Summary to 5.2 % in August, the weakest expansion rate In general.
However, the strong recovery in the total demand is still far from hand, as the economy is struggling with long housing and the soft labor market, as economists said, which enhances calling for more powerful policies to enhance consumption.
A list of economic data outside China has drawn in recent weeks a bleak picture of the second largest economy in the world, with Retail sales growth slows for the third month in a row And consumer price index Once again it is dipped in negative landsEmphasize slow domestic demand.
Non -equal recovery
Reconstruction in August was unequal across industries. Economists said that the demand for raw materials, such as steel, remained flexible while remaining an appetite for ready -made goods such as electric cars and solar panels defeated.
Hong Howe, the administrative partner at Lotus Assets, said that the upstream industries, such as participating in the production of raw materials and non -kinetic minerals, have witnessed a greater restoration of profits, benefiting from the “strong commodity cycle” that still has legs to operate in the coming months. Steel production achieved profit in the first eight months, according to NBS.
“The high prices and sizes in the raw material production sector indicate the recovery of demand”, while some sectors in the direction of the river, such as EVS and solar panels, have witnessed a rise in prices, but the demand decreased.
OPSTREAM Industries increased by 37.5 % from the previous year in August, compared to a 13.5 % decrease in July, according to Goldman Sachs estimates, with decreased demand and prices while costs decreased. The profits in the rated industries increased by 15.8 % last month, according to Goldman’s estimates.
“The remarkable improvement of profitability in the raw materials sectors, such as steel, is hinting at the government’s anti -revolutionary policies,” said economists on the Wall Street bank.
Among the industrial companies, state -owned companies were better with 50 % profit jumping on an annual basis, compared to 13.2 % increase in profits for private companies, stressing how government companies responded to industries on the source “more” to government policies.
Persons in the auto industry, manufacture of chemical products and textiles decreased by 0.3 %, 5.5 % and 7 %, respectively, According to NBS data.
XIE added: “Without a stronger total demand, the source gains can come at the expense of medium and direct sectors,” expecting Beijing to reveal additional financial support, with a total of 500 billion to 1 trillion yuan, which aims to finance certain strategic industries.
Supply-re-balance
Chinese politicians have doubled in their campaign to “combat the revolution” in recent months, and seeking to balance the excess supply with poor demand while pressing companies to avoid the severe discount that led to the erosion of profits.
Industrial companies profit margins were subjected to additional pressure this year, as definitions in the United States were higher on export momentum in China and world trade flows were disrupted. By mid -2015, the total profit margin of industrial institutions in China decreased to levels that have not been seen since the early first decade of the twentieth century, the Economic Intelligence Unit said in a report earlier this month.
“The restructuring of the excessive capacity sectors in China is already operating,” said European Union economists.
The European Union’s leading economists said that the unification process will become a “permanent topic” of the fifteenth plan of China for a period of five years. Political asset investment saw A sharp slowdown in January to August a period.
The Chinese authorities will hold a closed meeting next month to review the economic developments plans for the next five years.
Xu added that “successful monotheism” will witness the rate of use of industrial capabilities to 75 %, with the return of the producers’ price index to positive lands and industrial profits that are in line with the growth of the nominal GDP.
China The rate of industrial capabilities has decreased to 74 % In the second quarter, the lowest level since early 2024.
Meanwhile, China has also intensified efforts to increase domestic demand, financing a support program that encourages consumers to trade in old goods for new goods, while Intensifying children care to support And motivating companies to expand employment.
Beijing is likely to follow a “gradual” unification to reduce turmoil amid the confidence of companies already, although analysts in the European Union, instead of “sudden and significant closure of the ability of the offer”-although the profits and industrial prices improved after the restrictions of modern supply.
in Release Monday, the Chinese Ministry of Industry and Information Technology has reduced the goal of the annual product of the main non -iron minerals, including copper and aluminum, next year.
China is scheduled to issue the purchasing manager index in September on Tuesday, a weekly weekly holiday for a week that will last until October 8.
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