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According to the official data agency, high commodity prices are putting pressure on Chinese businesses, although large sectors of the country’s industry have recovered from the initial effects of the coronavirus pandemic.
According to data released by the National Statistics Office on Thursday, a 57 per cent rise in profits of large industrial companies in April was a year earlier than the pandemic that benefited the sector’s low-base comparison in 2020. Earnings rose 92 percent in March.
The data show that there has been an “irregular” improvement in business performance in China, the NBS said, despite the broad economy recovery in the last year. Higher commodity prices have boosted profits for miners and other producers, but it also appears to increase costs for businesses down the river along the supply chain, the NBS added.
“The profitability of some consumer goods industries has not yet recovered to the level before the pandemic,” NBS official Zhu Hong said. “Along with high prices for packaged raw materials, this has increased the pressure on the production and operation of medium-stream and river industry.”
The Chinese government has expressed greater concern over rising commodity prices, partly due to the country’s rapid industrial recovery and hopes for stronger global growth this year.
Factory prices in China, driven by commodity prices, it jumped 6.8 percent last month, the fastest pace in three years. But consumer price inflation remained below 1 percent.
Li Keqiang, China’s prime minister, chaired the council of state last week, saying measures should be taken to ensure that these costs are not channeled into consumer prices.
The country’s economic planning agency warned on Monday of “excessive speculation” and said it would act against goods and monopolies, which helped boost it. the price of iron fell by 7% after hitting a record high This month.
NBS data showed that the profits of businesses involved in non-ferrous metal smelting increased by 484 percent and mining profits doubled from January to April compared to the same period a year earlier.
Consumption lagged behind the strength of the industrial sector in China’s recovery, as growth in gross domestic product returned to pre-pandemic rates at the end of last year. This is a challenge for companies with higher costs and higher consumer confidence, which have not fully recovered.
“The problem for them is that it’s usually very difficult to pass on to cost consumers,” said China’s chief economist Larry Hu Macquarie.
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