The decline is principally on the back of fall in foreign demand. However, the manufacturing index of small and medium-sized businesses indicates a growth in activities in May. The government has promised 3600 billion yuan to encourage employment.
Beijing (AsiaNews / Agencies) - Large Chinese industries lost 27.4% of their profits on an annual basis in the first four months of 2020. As a result of the coronavirus, the earnings of companies with a turnover above 20 million yuan a year stopped at 1260 billion yuan (158 billion euros). State-owned companies are the ones that recorded the biggest losses (46%), followed by those with foreign capital (28.8%).
Despite the negative numbers, largely due to the decline in foreign demand, the Chinese economy seems to be slowly recovering. In April, the main manufacturers had losses of 4.3%, a marked slowdown compared to those of March (34.9%).
The Caixin manufacturing index went from 49.4 in April to 50.8 in May, indicating a growth in activities in small and medium-sized businesses. The official PMI index, which takes into account larger companies, instead stood at 50.6 points, slightly down on last month.
At the annual session of the National People's Congress, which closed on May 28, Prime Minister Li Keqiang promised employment incentives. According to the non-governmental agency Beijing Social Work Development Center for Facilitators, 58 million Chinese - mostly migrant workers from rural areas - are unemployed at the moment, a higher figure than that provided by the government.
To cope with the pandemic crisis and the growing loss of jobs, Li announced the launch of a 3600 billion yuan (458 billion euro) economic stimulus. The intervention will bring the 2020 budget to 3.6 %% of GDP, a record level for Chinese finances (in 2019 the share was 2.8%). In the first quarter of the year, the Chinese economy had a 6.8% decrease compared to the same period of 2019, the first contraction in negative territory since 1976.