© Reuters. FILE PHOTO: A worker welds a bicycle steel rim at a factory manufacturing sports equipment in Hangzhou, Zhejiang province, China September 2, 2019. China Daily via REUTERS/File Photo
BEIJING (Reuters) – Profits at China’s industrial firms fell 6.7% in July from a year earlier, extending this year’s slump to a seventh month as weak demand squeezed companies amid a faltering post-pandemic recovery for the world’s second-biggest economy.
Earnings shrank 15.5% year-on-year for the first seven months, following a 16.8% decline in the first half of the year, data from the National Bureau of Statistics showed on Sunday.
Profits were down 8.3% in June, according to the bureau, which only occasionally publishes monthly figures.
Big Chinese manufacturers posted losses for the first half, with engineering firm China Aluminum International reporting a net loss of 830.6 million yuan ($114.2 million), compared with a year-earlier net profit of 123.6 million yuan.
Major banks have downgraded their growth forecasts for China this year to below the government’s target of around 5% as recovery sputters on a worsening property slump, weak consumer spending and tumbling credit growth, prompting the authorities to slash interest and promise further support.
China’s central bank said this month it would keep its policy “precise and forceful” to support recovery. It remains to be seen if more significant measures would come to shore up growth.
President Xi Jinping on Tuesday told a forum in South Africa that the economy was resilient and that the fundamentals for long-term growth remained unchanged.
Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.77 million) from their main operations.
($1 = 7.2761 )