BEIJING – China’s industrial profits extended this year’s double-digit pace of declines into a sixth month as waning demand took a toll on companies’ profit margins, bolstering the case for additional policy support measures.
The year-to-date 16.8 percent fall followed an 18.8- percent profit decline in January-May, and reinforced a frail economic recovery that brought weaker-than-expected 6.3 percent growth in the second quarter.
In June alone, industrial earnings shrank by 8.3 percent, according to data from the National Bureau of Statistics (NBS) on Thursday. Profits were down 12.6 percent in May.
The struggles confronting Chinese manufacturers were typified by Maanshan Iron and Steel, a major steelmaker, which forecast in mid-July that it would swing to a net loss of 2.24 billion yuan ($314.1 million) for the first half-year from a net profit of 1.43 billion yuan a year earlier.
China’s top leaders on Monday pledged to step up policy support for the economy and acknowledged a “tortuous” post-COVID recovery, but analysts saw few signs that aggressive stimulus was likely while concerns are mounting over debt risks.
Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.79 million) from their main operations.
($1 = 7.1320 Chinese yuan)