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China's industrial profits fall 3.1pc in June

Published: July 27, 2019 14:23:35 | Updated: August 11, 2019 19:54:06


File Photo (Collected)

The industrial profits in China fell in June, after a brief gain the previous month, fuelling concern that a slowdown in manufacturing from a bruising trade war will drag on economic growth.

The country’s industrial profits have been softening since the second half of 2018 as the economy slowed and the US-China trade dispute escalated.

Moreover, many industrial firms are putting off business decisions and scaling back manufacturing investment. The economic growth of the country in the second quarter slowed to a near 30-year low.

Industrial profits fell 3.1 per cent in June from a year earlier to 601.9 billion yuan ($87.5 billion), according to data released by the National Bureau of Statistics (NBS) on Saturday, reports Reuters.

However, the industrial profits in the second largest economic country of the world rose to 1.1 per cent in May.

In the first six months, industrial firms earned profits of 2.98 trillion yuan, down 2.4 per cent from a year earlier, compared with a 2.3 per cent drop in January-May.

The drop in first-half profits was driven by declining profits in the auto, oil processing and steel sectors, Zhu Hong of the statistics bureau said in a statement accompanying the data.

Producer price inflation, one gauge of industrial profitability, eased to zero in June from a year earlier, rekindling worries about deflation, which could prompt authorities to launch more aggressive stimulus measures.

US and Chinese negotiators will meet on Tuesday for the first time since their presidents, Donald Trump and Xi Jinping, agreed in late June to revive talks in a bid to end the year-long trade war.

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