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China’s industrial profits contract in August as economy battles slow growth amid trade war with US

  • Profits at China’s large industrial firms fell 2 per cent in August, with a year-to-date decline of 1.7 per cent
  • The National Bureau of Statistics blamed slowing sales, a drop in product prices and super typhoons that impacted manufacturing

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Car manufacturing profits in China declined 19 per cent between January and August. Photo: Xinhua

Profits at China’s large industrial firms dropped 2 per cent in August, with a year-to-date decline of 1.7 per cent, as the world’s second largest economy battles slow growth amid a trade war with the United States.

The contraction followed a brief recovery in July, when industrial profits rose 2.6 per cent year-on-year, according to data from the National Bureau of Statistics (NBS).

The NBS said August’s decline was largely driven by slowing sales, a drop in product prices and super typhoons that impacted manufacturing in China.

From January to August, total industrial profits were down 1.7 per cent, the same reading as the year to July. China’s statistics agency said the profit decline eased marginally in various industries, including cars, electronics, ferrous metals and advanced manufacturing.

Overall industrial profits were driven by the private sector, which saw gains of 6.5 per cent to 1.13 trillion yuan (US$158 billion) between January and August, slowing from 7 per cent growth in the first seven months of the year.

The profitability of state-owned enterprises (SOEs) remained sluggish, plunging 8.6 per cent to 1.21 trillion yuan (US$170 billion) compared to the same period last year. From January to July, SOE profit was recorded at 1.09 trillion yuan (US$153 billion), a fall of 8.1 per cent year-on-year.
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