China’s industrial profits post biggest drop in nearly three and a half years
- April’s 3.7 per cent drop, the largest decline since December 2015, led by state-owned industrial firms, whose profits dropped 9.7 per cent
- Date comes as a further blow to the Chinese economy in the month before the escalation of the trade war with the United States
Chinese industrial profits slumped at their fastest pace in nearly three and a half years in April, the last month before the sudden escalation of the trade war with the United States, underscoring the continuing downturn in pressure on the world’s second largest economy and the challenge faced by policymakers to keep economic growth on track.
Industrial profits stood at 515.39 billion yuan (US$74.7 billion) last month, down 3.7 per cent compared to a year earlier, the largest percentage decline since December 2015, according to data released by the National Bureau of Statistics (NBS) on Monday.
Industrial profit growth has decelerated since April 2018, and has been negative since November except for March, with the figures for January and February combined due to the Lunar New Year holiday.
The NBS attributed the decline in April to a high base from a good level of profits a year ago and lower demand last month after a strong rise in March. Data suggests that a high base will also affect the year-on-year calculations in each of the next four months.