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China's economic recovery
EconomyChina Economy

China’s May industrial profits kept tumbling, raising calls for more government support

  • Industrial-profit data on Monday shows slight improvement from April, but factory production and manufacturing margins remained strained amid strict Covid curbs
  • China’s gross domestic product (GDP) likely to grow by about 1 per cent in second quarter, according to a central bank adviser

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Profits at China’s industrial enterprises fell by 6.5 per cent in May, year on year. Photo: AFP
Leona Liu Ying

China’s industrial profits continued their steep decline in May, albeit at a slower pace than in April, and the head of its central bank has vowed continued support for the nation’s economic recovery, with stable prices and employment support among the top priorities.

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With coronavirus restrictions still weighing on factory production and squeezing manufacturing margins, profits at industrial enterprises fell by 6.5 per cent last month, year on year, according to data released by the National Bureau of Statistics (NBS) on Monday.

“Manufacturing production is still facing many difficulties, and the recovery is not solid yet, while the global situation is trending more complicated and severe,” the NBS said. “Industrial profits are still confronted with many uncertainties.”

The industrial-profit data covers large firms with annual revenue of more than 20 million yuan (US$3 million) from their main operations. And May’s decline came at a slower pace than the 8.5 per cent plunge a month prior.

Central bank governor Yi Gang, in an interview with state media on Monday, reiterated oft-repeated sentiment that China’s economy continues to face downward pressure due to the pandemic, along with external shocks, but he also noted how inflation is largely stable.
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