Editorial | Listed firms’ profits show China’s economic recovery is on track
Mainland firms listed onshore delivered solid results for the first half of the year, despite global uncertainties and domestic realities
These are solid if not spectacular results, with most economic sectors showing noticeable improvement besides real estate. But even in the badly hit property market, declines are narrowing.
Since China emerged from the Covid-19 pandemic, more firms have shown discipline in optimising efficiency and redoubling efforts to upgrade their technology and innovate. But this remains a work in progress as both state authorities and the private sector battle neijuan or “involution”, that is, self-defeating cutthroat competition among firms leading to mutual destruction of profits, if not collapse.
Despite the challenges posed by Washington-imposed tariffs, a macroeconomic slowdown and a still sluggish property market, non-financial companies maintained an overall revenue of 30.42 trillion yuan in the first half of the year, roughly at last year’s levels, and a total net profit of 1.59 trillion yuan, an increase of 0.9 per cent from last year.
Manufacturing recorded revenue and net profit growth of 4.7 per cent and 7.8 per cent. The consumer sector – especially electric vehicle and home appliance firms – was boosted by state subsidies and trade-in programmes. Gaming companies and cinema operators had a stellar performance, reporting net profit growth of more than 70 per cent.
Exporters’ revenue rose 4.5 per cent from a year earlier to 4.9 trillion yuan. The shipbuilding sector also performed well.