China's industrial profits fall 8.8pc in biggest decline in four years
August figures renew concern over whether China can maintain overall growth target of 7 per cent
China's industrial profits suffered their biggest year-on-year fall in four years last month, hit by lower investment returns and the devaluation of the yuan, the National Bureau of Statistics said on Monday.
The numbers raised fresh concerns about whether the nation can keep to its 7 per cent economic growth target.
Industrial profits - which cover large enterprises with annual revenue of more than 20 million yuan (HK$24.2 million) from their main operations - fell 8.8 per cent in August from a year earlier to 448.1 billion yuan. It was the biggest drop since the government began releasing the monthly data in 2011.
Separately, the Ministry of Finance said state firms' profits fell 6.6 per cent in the first eight months from a year earlier, quickening from a 2.3 per cent decline in the period from January to July.
The bureau attributed the declining industrial profits to exchange-rate losses, which pushed up financial costs by 23.9 per cent - reversing a 3 per cent fall in July. Falling product prices and rising costs also dragged down profit performance, it said.
The recent stock market rout - in which the benchmark Shanghai Composite Index lost 40.1 per cent from its peak in mid-June - continued to affect investment income from industrial sectors, the bureau said.