China's industrial sector managed to report decent numbers for 2019, mainly bolstered by the stellar performance of the country's high-tech manufacturing industry. The latest data from the National Bureau of Statistics (NBS) published on Monday showed that industrial companies raked in a total of 6.2 trillion yuan, or $885.7 billion, last year.
When compared to 2018, total profits last year dropped by 3.3 percent. This increased from the 2.1 percent decrease reported for the first 11 months of 2019. NBS senior statistician, Zhu Hong, mentioned in a statement that major industrial firms last year were heavily affected by factors such as weak demand and lower prices. These factors resulted in a minor drop in overall profits for most companies within the sector.
Despite these factors, companies still managed to report a 3.8 percent increase in overall revenues when compared to the previous year. However, the 3.8 percent increase is significantly lower than the 8.6 percent revenue growth reported in 2018. Zhu explained that higher costs were the main culprit in the lowered profits even though companies generally increased revenues.
The industrial sectors that reported the most profit decline for 2019 included those in the steel, automobile, petroleum processing, and chemical engineering sectors. Steel companies reported a 38.6 percent decline in profits, with chemical engineering reporting a 25.6 percent decline. Auto industry manufacturers reported a 15.9 percent decline, while petroleum-processing companies reported a 42.5 percent decline. State-owned industrial firms also reported a decline in profits for 2019.
Last year's performance may have decreased overall but Zhu explained that there were still some bright spots. High-tech manufacturing and other emerging industries within the sector have apparently expanded steadily. Last year, companies that fall under these categories reported a steady increase in profits by about 4.8 percent. This represents a healthy growth rate when compared to the 3 percent increase in profits reported in 2018.
Zhu attributed the continued profit growths within these industries to the government's continued support and the imposition of favorable policies. High-tech manufacturing firms significantly benefited from the various large-scale tax and fee cuts imposed by the government, along with other similar supporting policies.
Apart from high-tech manufacturing, other industries that saw significant growth rates included those in the special equipment manufacturing, refined tea, and alcoholic beverage industries. All of the aforementioned sectors managed to reach double-digit profit growth last year. Meanwhile, companies in the pharmaceutical manufacturing, food, and building material industries also reported profit growths of between 5 and 10 percent for 2019.
