China’s industrial profit growth slows due to high commodity prices, coronavirus, component shortages
- Profits rose 10.1 per cent year on year to 680.3 billion yuan (US$105 billion) last month compared with a 16.4 per cent gain in July
- Industrial production rose in August at its slackest pace since July 2020, weighed by coronavirus outbreaks, high raw material prices and Beijing’s bid to cut carbon emissions
Profits at China’s industrial firms grew at a weaker pace in August from a year earlier, slowing for a sixth consecutive month, as manufacturers struggled with high commodity prices, the coronavirus and shortages in some key components.
Momentum in the world’s second-biggest economy has weakened in recent months with its vast manufacturing sector buffeted by gathering headwinds.
Industrial production rose in August at its slackest pace since July 2020, weighed by domestic Covid-19 outbreaks, high raw material prices, a campaign by Beijing to cut carbon emissions and a persistent shortage in parts such as semiconductors.
A sustained and stable recovery in corporate profits is facing more challenges
For the January-August period, industrial firms’ profits rose 49.5 per cent year on year to 5.61 trillion yuan, slowing from a 57.3 per cent increase in the first seven months of 2021.
“A sustained and stable recovery in corporate profits is facing more challenges,” said Zhu Hong, senior statistician at the statistics bureau, in a statement.