Employees work at a steel plant in Dalian, Liaoning province. [Photo by WANG YANG/FOR CHINA DAILY]

Effective bailouts, rebound in sales and production resumptions bolster sentiment

Profits at industrial firms declined at a slower pace in April as production and sales rebounded amid the nationwide restoration of economic activities, the National Bureau of Statistics said on Wednesday.

Analysts said the nation's newly-announced policy package to bail out businesses will help sustain the revival in industrial profits, with sectors related to the economic upgrade set to outperform.

The fall in profits of major industrial firms in China narrowed for the second consecutive month and stood at 4.3 percent on a yearly basis in April, substantially recovering from the 34.9 percent plunge a month earlier.

Total industrial profits in the first four months of the year stood at 1.26 trillion yuan ($176 billion), down more than a quarter from a year earlier, according to the NBS.

According to the NBS, profits in the high-tech manufacturing sector rose by 55.7 percent last month, versus a 0.5-percent gain in March. Automobiles, special-purpose equipment, electric machinery and electronics were also among the sectors that saw the biggest recovery in April.

Profits of the automobile industry rose 29.5 percent year-on-year, rebounding from the 80.4-percent slump in March, indicating that the policies to boost demand for autos are taking effect.

Despite the improving conditions for the industrial sector backed by supportive policies and economic upgrading, the year-on-year change in industrial profits may remain negative in the coming months, said Wu Chaoming, chief economist with Chasing Securities.

The uncertainties in the restoration of overseas economic activities could cause head winds to the recovery in global demand and industrial goods prices, which could especially put pressure on up-stream industrial firms, said Wu.

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