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. In remarks reinforcing rising concern over whether China can maintain its 7 per cent growth target amid disappointing economic figures, bureau spokesman Sheng Laiyun said last Friday that his "personal view" was that full-year growth of between 6.5 and 7.5 per cent would be considered as "around 7 per cent". Even so, Premier Li Keqiang gave an upbeat assessment in his meeting on Monday with European Commission vice-president Jyrki Katainen, saying the economy was operating within a "reasonable range" and that new growth drivers were emerging, state-run CCTV reported. Read more: China's yuan devaluation is part of a wider transition The business sector is feeling the heat after the central bank allowed the yuan to depreciate 4.5 per cent against the US dollar between August 11 and the end of the month. An official with a commercial bank said some of the bank's corporate clients had reported possible default risk on their foreign exchange derivative products due to the yuan's sharp fall. A bank official with a small Fujian-based lender said banks remained reluctant to lend because of rising bad loan risks. A memo for an internal meeting attended by economists from the National Development and Reform Commission and the Ministry of Finance showed deeper concerns about the short-term outlook. Firms lacked initiative to invest in the face of a high debt burden, and policies and reforms faced difficulties being effectively implemented by local governments, the memo said. A Beijing-based trader with a large commodities trading firm said her company was in financial difficulty because of China's waning appetite for commodities. "If the government doesn't introduce stimulus policies, the commodities market won't recover," she said. Leading mainland brokerage China International Capital Corporation forecast gross domestic product growth to reach 6.5 per cent year on year in the third quarter, down from the previous quarter's 7 per cent. It expected the government to step up investment and the central bank to cut the benchmark interest rate by 25 percentage points and lower required reserve ratios by a combined 100 basis points for the rest of the year. It said, however, that only market-oriented reforms could revive investment initiative in the private sector in the long run.