China's Industrial Profits See Sharp Decline in May
(MENAFN) Profits at industrial companies in China dropped sharply by 9.1% in May compared to the same month last year, driven by sluggish domestic demand and falling prices for industrial products.
The data, reported by China’s National Bureau of Statistics (NBS) on Friday, tracks profits of industrial enterprises with annual revenues exceeding 20 million yuan (roughly $2.79 million).
This monthly decline reversed April's modest 3% growth, marking the largest drop since October of the previous year, when industrial profits slumped by 10%.
For the first five months of 2023, industrial profits dipped 1.1% year-on-year, a reversal from the 1.4% growth seen in the January-April period.
While sectors like industrials and utilities posted slight profit increases, the mining sector saw a sharp 29% drop. The vehicle manufacturing industry also experienced an 11.9% decline in earnings.
State-owned companies endured a 7.4% fall in profits during the January-May period, while non-state-owned enterprises saw a smaller 1.5% drop.
The figures came amid a mix of economic reports from China. While retail sales surged 6.4% in May—the fastest pace since late 2023, driven by government incentives—the country's fixed-asset investment and industrial production failed to meet expectations.
This financial strain also follows heightened US-China tariff tensions. In April, the US imposed substantial tariffs on Chinese goods. However, in May, the two countries agreed to a 90-day rollback of some of these tariffs.
In related news, US President Donald Trump announced on Thursday that the US had reached a new trade agreement with China, though details of the deal remain undisclosed.
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