China's listed firms sustain recovery momentum as policy support builds up

BEIJING, Sept. 26 (Xinhua) -- China's listed companies have seen improvement in performance quarter by quarter since the beginning of this year, with service consumption, export growth and new economic drivers contributing to the recovery trend.

A total of 5,104 companies listed on the Shanghai and Shenzhen bourses saw their combined profits decrease by only 0.4 percent from a year earlier in the second quarter, significantly improving from a drop of 4.5 percent in the first quarter, according to their latest half-year financial reports.

Listed firms have seen narrowing declines in profits and a drop in the proportion of loss-making companies, their reports showed. Nearly 80 percent of the listed firms reported profits while around 50 percent of the companies experienced profit growth in the first half.

Experts held that Chinese listed firms, whose revenue accounted for 56.5 percent of the country's GDP in the first six months, serve as a window to observe new trends in the country's economic development.

RECOVERY IN CONSUMPTION AND EXPORTS

Despite rising challenges from home and abroad, China's economy expanded 5 percent year on year in the first half, putting the country on track to hit its full-year economic growth target of around 5 percent.

During this period, service consumption has continued to recover, supported by robust travel and tourism growth. Airport companies reported a year-on-year rise of 20.7 percent in revenue.

Commodity consumption has also seen positive signs, with net profits of listed companies in sectors such as food and beverage, consumer electronics and automobile rising by 14.1 percent, 24.4 percent and 22.7 percent, respectively.

Moreover, listed companies have increasingly tapped into international markets, with improving competitiveness in overseas markets. In the first six months, China's exports in goods rose 6.9 percent year on year, while the overseas revenue of listed companies surged by 13.4 percent.

Companies in the electronics, household appliances and automobile industries reported rises of 17.6 percent, 13.8 percent and 10.7 percent respectively in overseas revenue.

Huang Wentao, chief economist at China Securities, said that China's trade structure has shown continuous improvement, signaling the strengthening global competitiveness of the country's economy.

NEW GROWTH DRIVERS

China's manufacturing companies, which account for nearly 70 percent of the total number of the listed firms, demonstrated resilience in the first half, underpinning the foundation for the country's high-quality economic development.

Listed companies in high-tech manufacturing sectors, including electronics, automobile and communication equipment, stood out with net profits up 39.6 percent, 22.7 percent and 17.6 percent respectively.

During this period, investment in research and development (R&D) for listed companies reached 709.46 billion yuan (about 100.84 billion U.S. dollars), marking a 5.1-percent increase from the previous year. The R&D intensity, measured as a percentage of revenue, rose to 2.3 percent, up from 2.2 percent in the same period last year.

Li Zhan, chief economist at China Merchant Fund, said that with the accumulation of positive factors in China's economy, there is a solid foundation for the country to realize this year's growth target.

China has rolled out an array of measures to boost growth this year, including a program that promotes large-scale equipment upgrades and consumer goods trade-ins, and the issuance of ultra-long special treasury bonds, among others.

In the latest move, China announced a raft of monetary stimulus, property market support and capital market strengthening measures earlier this week to shore up the economy.

The country will cut the reserve requirement ratio, lower mortgage rates on existing home loans and create new monetary policy tools to support the stock market, and encourage medium and long-term funds to enter the capital market.

Experts consider the release of the new batch of policies a positive signal of strengthening policy coordination and efforts to boost the vitality and resilience of the Chinese economy.