China’s industrial profits extend slump for Jan-Aug, but pace of downturn eases

BEIJING (Reuters) – Profits at China’s industrial firms extended a double-digit drop for the first eight months, but the pace of declines eased slightly as a flurry of policy support steps has started to stabilise parts of the stuttering economy.

The 11.7% year-on-year fall in profits narrowed from a 15.5% contraction for the first seven months, in line with expectations and potentially suggests a modest recovery is starting to take root for some businesses.

That was backed up by August earnings posting a surprise surge of 17.2% from a year earlier, data from the National Bureau of Statistics (NBS) showed on Wednesday. Profits were down 6.7% in July.

As Beijing steps up policy support for its faltering economy after a brief post-COVID recovery, recent data have shown signs of stabilisation with stronger-than-expected bank lending, industrial output and retail sales growth for August.

Still, persistent weakness in the crisis-hit property sector that accounts for one-fourth of the world’s second largest economy remains a drag on growth.

Last month, China’s new home prices fell at the fastest pace in 10 months. Eased borrowing rules are showing signs of providing some major cities like Beijing a boost in new home sales, but concerns remain that the improvement might be short-lived.

Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.75 million) from their main operations.

(Reporting by Qiaoyi Li and Beijing newsroom; Editing by Shri Navaratnam)