Amid China’s economic slowdown, the industrial profit in the January-July period fell compared to the same period last year.
According to China’s National Bureau of Statistics on the 27th, industrial profits in the January-July period fell 1.1 percent from the same period last year to 4.9 trillion yuan.
Previously, industrial profits increased 1.0% in January-June, but it was reversed as industrial profits decreased significantly in July amid the heat wave and power shortages.
Citing data from the National Bureau of Statistics, Hong Kong’s South China Morning Post (SCMP) reported that industrial profit in July was calculated to be 622.7 billion yuan.
Industrial profits are an indicator of the profitability trend of industrial companies. The National Bureau of Statistics calculates and announces the index every month for companies with annual sales of more than 20 million yuan.
However, when announcing trends in industrial profits every month, only cumulative figures from the beginning of the year to the month are announced, and figures for each month are not separately announced.
Of the total 41 sectors, profits in 25 sectors decreased, of which profits in the steel industry plunged nearly 81% year-on-year.
Construction materials were also hit hard by the sluggish real estate market.
On the other hand, the profits of coal and energy producers, whose demand soared due to power shortages amid the heat wave, doubled compared to the same period last year.
Bloomberg said, “The Chinese economy worsened in July as retail, industrial production, and investment all fell short of experts’ expectations.”
As various economic indicators were low, Chinese authorities began to stimulate the economy by cutting the benchmark one-year loan preferential rate (LPR) and five-year LPR, and injecting 1 trillion yuan (about 195 trillion won) into the market centered on infrastructure construction.
Bloomberg said, “However, experts believe that the measures are not enough to offset the damage caused by the repeated COVID-19 blockade and the sluggish real estate market,” adding, “Experts expect China’s economic growth to be 4% this year, far below the 5.5% the authorities have put forward.”
The SCMP pointed out, “Most of the benefits of the Chinese government’s economic stimulus measures, such as infrastructure investment and bond issuance, go to state-run companies.”