Profits of major Chinese industrial firms dropped 0.3 per cent year on year in June, down from 0.6 per cent growth posted in May, underscoring the challenge facing the nation’s former growth drivers as the economy slows and commodity prices slump.
The National Bureau of Statistics (NBS) said on Monday profits at industrial companies with annual revenues of more than 20 million yuan ($3.27 million) totaled 588.6 billion yuan in June.
Industrial profits of these firms reached 2.84 trillion yuan in the first half of the year, down 0.7 per cent year on year, the NBS said. The decline narrowed 0.1 percentage points from the rate seen in the January-May period.
China will strive for 8 per cent growth in industrial output this year.
China’s old growth drivers are faltering, weighed by overcapacity and a property downturn. Services companies are faring better, bolstering an economy that expanded at the slowest pace in 24 years in 2014.
Coal output in China, the world’s largest coal producer, continued to decline in the first half of 2015, but at a slightly slower pace.
China’s coal production fell 5.8 per cent year on year to 1.79 billion tonnes in the first six months, compared with a 6 per cent decrease in the Jan.-May period, according to figures from the National Development and Reform Commission (NDRC) released on Monday.
China’s economy expanded 7 per cent year on year in the second quarter, unchanged from the first quarter but better than market expectations, fueling hopes that the economy may be stabilizing.