Growth in profits earned by major Chinese industrial companies picked up pace in June, supported mainly by accelerated growth in production and sales and narrowing price declines of products, official data showed on Wednesday.
Profits earned by major industrial firms with annual revenue above 20 million yuan ($3 million) grew 5.1 percent year-on-year to 616.31 billion yuan in June, up 1.4 percentage points from May, according to data from the National Bureau of Statistics (NBS).
That performance brought the year-on-year industrial profit growth in the first half of 2016 to 6.2 percent, down 0.2 percentage points from the January-May period, the NBS data showed.
Main reasons behind the acceleration in industrial profit growth in June are faster growth in industrial output and sales and slower decline in prices, He Ping, an official with the NBS, said in an article on the agency's website on Wednesday.
Industrial output in June rose 6.2 percent year-on-year, up from 6 percent in the previous month, while revenue grew 3.8 percent year-on-year, up 0.8 percentage point from May, according to He, noting the decline in the producer price index in June narrowed by 0.2 percentage point from May to 2.6 percent.
Supporting the faster growth in industrial profits in June was also profit growth in sectors such as electronic manufacturing and oil processing, which grew by 19.5 percent and 61.9 percent year-on-year, respectively, He pointed out.
Other positive changes for industrial companies included less burden on production and funding costs, a moderating industrial debt ratio, He said.
But unfavorable business conditions for industrial firms remain, including unbalanced profits growth among different industrial sectors, profits declines in oil mining and power and slower growth in steel, and cash flow difficulties, He said.
