China's July industrial profits swing to growth - NBS

Profits at China’s industrial firms returned to growth in July, helped by public works spending and improved margins in the petrochemical and auto sectors, but an economic slowdown and the U.S. trade war are expected to weigh on the business outlook.

Industrial profits rose 2.6% in July year-on-year to 512.7 billion yuan ($72.28 billion), according to data released by the National Bureau of Statistics (NBS), swinging from a 3.1% decline in June.

Despite the turnaround in headline growth, worsening conditions for businesses exposed to global trade and smaller private sector firms are likely to add to case for more government support to shore up slowing economic growth.

“The downward pressure on the economy is relatively high, the market demand is slowing down, the prices of industrial products are falling,” the statistics bureau’s senior statistician, Zhu Hong, said in a statement accompanying the data.

“There will still likely be volatility and uncertainty in profits of industrial enterprises,” Zhu said.

For January-July, industrial firms earned profits of 3.50 trillion yuan, down 1.7% from a year earlier. That compared with a 2.4% fall in the first six months.