Profits stood at 1.114 trillion yuan ($170.31 billion) in the first two months of 2021, up 179% from the same period last year when the COVID-19 pandemic paralysed economic activity, data from the National Bureau of Statistics (NBS) showed on Saturday.
They were also up 72.1% from the 2019 levels, bringing the two-year average growth to 31.2%, according to NBS. Profits had risen 20.1% in December.
The figures combine data for January and February to exclude distortions caused by the week-long Lunar New Year, which fell in February in 2021.
“Due to a combination of factors such as stabilising domestic and foreign demand, low bases and the ‘stay put’ initiative over the Lunar New Year, growth in industrial production and sales quickened, the rebound in corporate revenues and profits accelerated and profitability has recovered significantly,” Zhu Hong, senior statistician of NBS, said in a statement accompanying the data.
Millions of workers who normally travel home over the Lunar New Year holiday had stayed put this year due to COVID-19 fears. That kept factories humming over the period.
Margins in the raw material manufacturing sector rose 346% from a year earlier, data showed, as factory-gate prices accelerated at their fastest pace in more than two years.
China’s industrial output surged in the first two months of the year, while exports, a major growth driver for China after the pandemic shock, rose at a record pace in February.
China managed to contain the COVID-19 pandemic before many of its peers last year, making it the only major economy to have posted full-year growth in 2020, with an expansion of 2.3%.
Beijing has set a modest annual economic growth target at above 6% this year, well below analyst expectations, with Chinese Premier Li Keqiang saying that setting hugely different growth targets from year to year would “disturb market expectations.
Liabilities at industrial firms were up 9.4% year-on-year at end-February, versus 6.1% growth as of end-2020.
The industrial profit data covers large firms with annual revenues of over 20 million yuan from their main operations.
($1 = 6.5412 Chinese yuan renminbi) Reporting by Stella Qiu and Ryan Woo; Additional reporting by Roxanne Liu