Profits at industrial firms in China continued to plunge in the first three months of the year, as a pickup in factory production failed to offset a further decline in prices.
Industrial profits in the January-March period declined 21.4 percent from a year earlier, the Chinese National Bureau of Statistics said yesterday.
The drop narrowed only slightly from a fall of 22.9 percent in the first two months of this year.
Photo: AFP
Profits for last month fell 19.2 percent from a year earlier, figures showed.
“The decline in industrial companies’ profits is still relatively big, and companies’ losses are still high,” bureau statistician Sun Xiao (孫曉) said in a statement accompanying the data.
“We should continue focusing on expanding market demand, lift market confidence, improve companies’ expectations, better coordinate supply and sales, and push for industrial companies’ profits to rebound faster,” Sun said.
There were some positive signs: Automobile industry profits grew 9.1 percent last month from a year earlier, driven by recovering vehicle demand and rebounding sales, Sun said.
That reversed a 41.7 percent plunge in the January to February period.
Several consumer product manufacturing sectors also saw improvement, with the alcohol, beverage and refined tea industry recording a 39.9 percent jump in profits last month, the statement said.
Although factory activity has been improving, it has been tough for companies to pull themselves out of last year’s deep, COVID-19-induced slump.
Exports rebounded last month, largely due to resilient demand from Southeast Asia and other markets, yet the pickup in industrial output fell short of expectations.
Producer deflation has also persisted, a sign that factories are unable to boost prices, which is weighing on profits.
Foreign firms continued to lag behind other companies, but the pace of the fall in their profits is improving: a 24.9 percent fall in the first three months of this year, compared with a 35.7 percent decline in January and February.
Profits at private firms fell 23 percent in the first quarter, while those at state-owned enterprises dropped 16.9 percent.
The world’s second-largest economy is recovering at a faster pace than expected, with several economists upgrading their growth forecasts for the year after better-than-expected first-quarter data. However, the strength of the rebound is under scrutiny as the global environment remains uncertain.
Beijing is targeting economic growth of about 5 percent for the year, aided in large part by a rebound in consumer demand and stronger infrastructure investment.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS