Beijing, March 27 (IANS) The profits of China's biggest industrial companies plummeted by 38.3 per cent year-on-year in the months of January and February – the biggest drop in at least a decade – due to the impact of the coronavirus pandemic, data published by the National Bureau of Statistics (NBS) on Friday said.
Profits of the country's main industrial firms in the first two months of the year stood at 410.7 billion yuan ($58 billion), reports Efe news.
This decline represents yet another blow for China's industrial production as this indicator had recorded a 6.3 per cent year-on-year decrease in December before the suspension of activity due to the pandemic, with a total decrease of 3.3 per cent in 2019.
The NBS calculates the indicator by compiling the profits of industrial enterprises with profits higher than 20 million yuan per annum.
Of the 41 sectors surveyed by NBS, 37 recorded a reduction in their profits, while only four posted gains.
Among the worst affected industries were electronic goods (with a fall of 87 per cent), automotive (-79.6 per cent), electrical machinery (-68.1 per cent) and the chemical industry (-66.4 per cent).
In contrast, tobacco companies increased their profits by 31.5 per cent, non-ferrous metals by 28.3 per cent, oil and gas extraction by 23.7 per cent and the agricultural and processed food industry by 2.2 per cent.
NBS expert Zhang Weihua blamed the fall in profits on the extension of the Chinese Lunar New Year holiday on account of the coronavirus outbreak that paralyzed the country and thus affected both industrial production and demand.
Rising costs reduced profit margins while return to work and production did not occur normally during the epidemic even as costs and other expenses remained unchanged, Zhang said.
Industrial profits is one of the indicators which, along with international trade and manufacturing, among others, show the huge impact the COVID-19 pandemic has had on the economy of Asia's largest country.
As of Friday, China, where the pandemic originated last December, reported 81,782 confirmed coronavirus cases with 3,291 deaths.