A worker welds steel rims of a bicycle at a factory that manufactures sports equipment in Hangzhou, Zhejiang province, China, September 2, 2019.From China Daily, Reuters/file photo Acquisition of license rights
BEIJING, Aug 27 (Reuters) – Chinese industrial firms’ profits fell 6.7% in July from a year earlier as weaker demand hit firms as the world’s second-largest economy struggled to recover from the pandemic. This year’s slump extended to seven months. .
Earnings fell 15.5% year-on-year in the first seven months, following a 16.8% decline in the first half of the year, according to data released on Sunday by the National Bureau of Statistics.
Profits fell 8.3% in June, according to the agency. The agency releases monthly figures only occasionally.
“Commodity prices are declining, pressure on raw material costs in the midstream and downstream industries is easing, and unit prices of industrial enterprises are improving overall,” NBS statistician Sun Xiao said in an accompanying statement. , added that the unit price in July hit a record high. This is the first year-on-year decrease since the beginning of the year.
Major Chinese manufacturers posted losses in the first half, with engineering firm China Aluminum International (2068.HK) posting a net loss of 830.6 million yuan ($114.2 million), compared with a net profit of 123.6 million in the same period last year reported that it was 10,000 yuan.
Big banks have cut their growth forecasts for this year to below the government’s target of about 5% and officials cut interest rates as a worsening real estate slump, weak consumer spending and slowing credit growth dampen the momentum of the economic recovery. and pledges of further support.
The breakdown of the data shows that in the first seven months of this year, the profits of state-owned enterprises fell by 20.3%, those of foreign enterprises by 12.4% and those of private enterprises by 10.7%.
During this period, 28 out of 41 major industrial sectors experienced a sharp drop in profits, with the ferrous metal smelting and rolling industry reporting the worst slump at 90.5%.
The central bank said this month it would keep policy “precise and strong” to support the economic recovery. It remains to be seen whether further significant steps will be taken to boost growth.
President Xi Jinping told a South African forum on Tuesday that the economy was resilient and the long-term growth fundamentals remained unchanged.
Industrial profit figures cover companies with annual revenues of at least 20 million yuan ($2.77 million) from their main business.
($1 = 7.2761 Chinese yuan)
Reporting by Ethan Wang, Judy Hua, and Joe Cash.Editing: William Mallard
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