High-tech manufacturing spurs China’s July industrial profit growth

BEIJING: China’s industrial profits grew faster in July buoyed by high-tech manufacturing, even as sluggish domestic demand weighed on the recovery in the world’s second-largest economy.

Profits in July jumped 4.1% from a year earlier following a 3.6% rise in June, National Bureau of Statistics (NBS) data showed on Tuesday.

For the January-July period, profits expanded slightly faster at 3.6% compared with 3.5% in the first half, offering some hope of improving momentum amid dreary factory output, export, prices and banking lending numbers earlier in August.

“The mild expansion in industrial profits showed that domestic macro policies are taking effect” as the factory sector is undergoing a transition and upgrade, said Zhou Maohua, a macroeconomic researcher at China Everbright Bank.

The high-tech manufacturing sector, including the making of lithium-ion batteries and semiconductors and related equipment, led the earnings growth with a 12.8% rise in the January-July period, the data showed.

Still, “domestic consumption demand remains weak while the external environment is complex and volatile,” said NBS statistician Wei Ning, suggesting more efforts were needed to boost domestic demand.