Profits of industrial companies in China fell by 12.6% in May compared to the previous year. The shrinking demand was interpreted as an indicator of the ongoing economic slowdown in the country.
Profits of industrial firms in China continued to fall in May, driven by the shrinking demand.
Profits fell 12.6 percent year-on-year in May, according to data released Wednesday by China’s National Bureau of Statistics. Company profits in the January-May period also fell by 18.8 percent.
In May, exports fell for the first time in three months and industrial deflation worsened. On the other hand, profits of foreign companies slowed down a little more in the first five months of the year compared to the January-April period and decreased by 13.6 percent. The continuation of the decline in imports shows how weak domestic demand is.
On the other hand, profits in private companies fell by 21.3 percent, while profits in state-owned enterprises fell by 17.7 percent.
Declining profits are expected to continue to weigh on business sentiment, which is already declining. In addition, the shrinking demand is interpreted as an indicator of the ongoing economic stress in China, where the recovery has given a warning sign.