Profits at China’s industrial firms fell 6.7 percent last month from a year earlier, extending this year’s slump to a seventh month with weak demand squeezing companies as a post-COVID-19-pandemic recovery faltered in the world’s second-biggest economy.
Earnings shrank 15.5 percent year-on-year for the first seven months, following a 16.8 percent decline in the first half of the year, Chinese National Bureau of Statistics data showed yesterday.
Profits were down 8.3 percent in June, according to the bureau, which only occasionally publishes monthly figures.
Photo: EPA-EFE
“Commodity prices are running low, the pressure on raw material costs in the midstream and downstream industries has eased. Unit cost of industrial enterprises has improved overall,” bureau statistician Sun Xiao (孫曉) said in an accompanying statement, adding that unit costs last month posted the first year-on-year decrease since the beginning of this year.
Big Chinese manufacturers posted losses for the first half, with engineering firm China Aluminum International Engineering Corp (中鋁國際) reporting a net loss of 830.6 million yuan (US$113.95 million), compared with a year-earlier net profit of 123.6 million yuan.
Major banks have downgraded their growth forecasts for this year to below the government’s target of about 5 percent as recovery sputters on a worsening property slump, weak consumer spending and tumbling credit growth, prompting the authorities to slash interest and promise further support.
Industrial profit numbers cover firms with annual revenues of at least 20 million yuan from their main operations.
Earnings at state-owned enterprises tumbled 20.3 percent in the first seven months of this year, foreign firms posted a 12.4 percent decline and private-sector companies recorded a 10.7 percent fall, a breakdown of the data showed.
Profits dived for 28 of 41 major industrial sectors during the period, with the ferrous metal smelting and rolling processing industry reporting the deepest slump at 90.5 percent.
China’s central bank this month said it would keep its policy “precise and forceful” to support recovery.
It remains to be seen if more significant measures would come to shore up growth.
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