China industrial profits reflect impact of slowing economic growth
China’s industrial profits dropped 5.4 per cent in July from a year ago, quickening from June’s 1.7 per cent decline and extending a slide into a fourth month as headwinds from slackening demand at home and abroad intensify.
In the first seven months of the year industrial profits fell 2.7 percent from a year ago to 2.7 trillion yuan ($425 billion) , the National Bureau of Statistics said on Monday.
July’s profits alone were down 5.4 per cent from the same period a year ago to 366.8 billion yuan, the NBS said in a statement on its website, www.stats.gov.cn.
Chinese firms’ profits are falling as the economy slows. Annual economic growth expanded at the slowest pace in more than three years in the second quarter at 7.6 per cent.
July’s weak economic data has fanned worries that the economic slowdown may run into a seventh straight quarter in the three months of July-September. Analysts forecast full year growth to be 8 per cent, the lowest since 1999.
Among the 41 industries tracked by the statistics bureau, 25 sectors posted profit growth and 15 industries reported a profit drop in the first seven months compared with the year earlier period. One sector - oil refining, coke and nuclear fuels - made an outright loss.
As China’s economic growth cooled to a three-year low, inventories swelled at consumer firms such as auto dealers, food makers, liquor companies and department stores, according to a Reuters analysis of balance sheets from 350 Chinese companies.