China's Industrial Profits Suffer Biggest Slump This Year: Reuters

China's industrial profits swung back into sharp contraction in August, marking the biggest decline of the year, official data showed.

The August slump was attributed to weak market demand, the impact of natural disasters such as high temperatures, heavy rains, and floods in certain areas.

The downturn adds to a recent series of bleak business reports that highlight mounting economic pressures, Qiaoyi Li and Ryan Woo reported for Reuters.

Profits fell 17.8% in August compared to the same month a year earlier, following a 4.1% increase in July. Earnings grew at a slower rate of 0.5% in the first eight months of the year, down from 3.6% in the January-July period, according to the National Bureau of Statistics (NBS).

The August slump was attributed to weak market demand, the impact of natural disasters such as high temperatures, heavy rains, and floods in certain areas, said NBS statistician Wei Ning.

Additionally, a high statistical base from the previous year exaggerated the reversal, with falling profits in the automobile and equipment manufacturing industries contributing to the outcome.

Zhou Maohua, a macroeconomic researcher at China Everbright Bank, noted that a series of sluggish data earlier in the month has deepened concerns about an anemic recovery, prompting global brokerages to lower their 2024 growth forecasts for China to below the official target of around 5%.