Fall in mainland industrial profits slows in June
China's industrial profits extended this year's double-digit pace of declines into a sixth month as waning demand took a toll on companies' profit margins, bolstering the case for more supportive policy to help the economy. The 16.8 percent fall in the first half of 2023 followed an 18.8 percent profit decline in January-May, reinforcing views of a frail economic recovery that brought weaker-than-expected 6.3 percent growth in the second quarter. In June alone, industrial earnings shrank by 8.3 percent from a year earlier, according to data from the National Bureau of Statistics (NBS) on Thursday. Profits were down 12.6 percent in May. Industrial profits "have narrowed their year-to-date declines month by month," NBS statistician Sun Xiao said in an accompanying statement, adding that efforts will focus on the central government's directives to "implement macro policies in a scientific and precise manner" to expand demand. The struggles confronting Chinese manufacturers were typified by Maanshan Iron and Steel, a major steelmaker, which forecast in mid-July that it would swing to a net loss of 2.24 billion yuan (US$314.1 million) for the first half-year from a net profit of 1.43 billion yuan a year earlier. State-owned enterprises saw earnings tumble 21 percent in the first half, foreign firms posted a 12.8 percent decline and private-sector companies recorded a 13.5 percent fall, a breakdown of the data showed. Profits dived for 29 of 41 major industrial sectors during the period, with the ferrous metal smelting and rolling processing industry reporting the deepest slump at 97.6 percent. The nation's top leaders on Monday pledged to step up policy support for the economy and acknowledged a "tortuous" post-Covid recovery, but analysts see few signs that aggressive stimulus is likely while concerns are mounting over debt risks. (Reuters)