Charts of the Day: Industrial Profits Shrivel in China’s Wealthy Eastern Regions
Multiple local governments in eastern China, one of the country’s most developed and wealthiest regions, have reported plummeting industrial profits for the first eight months of the year, fueling concerns that the world’s second-largest economy is slowing further.
Of the 10 provincial-level regions, six saw industrial firm profits decline year-on-year in the period from January to August, according to data from the National Bureau of Statistics (NBS).
Shanghai led the drop, posting a 19.6% plunge in profits. Beijing came second with a 14.4% decrease. Shandong, Hebei, and Jiangsu provinces, as well as Tianjin municipality, also recorded declines.
The picture was bleak nationwide, with NBS data (link in Chinese) showing overall industrial profits fell 1.7% year-on-year during the same period, mainly due to the sluggish performance of upstream companies and the automobile manufacturing sector.
Carmaker profits were down 19% year-on-year, and sharply decreasing profits in fuel processing, manufacturing of raw chemical materials and chemical products, and smelting and pressing of ferrous metals also contributed to the drop, according to NBS data.
Since the second half of last year, China’s industrial profits have been on a downward trend, despite some short-term upticks, owing much to the ongoing economic slowdown, trade frictions with the United States, falling prices of industrial products, and high comparison bases.
China’s producer price index (PPI), which tracks the prices of goods circulated among manufacturers and mining companies, fell 1.2% year-on-year in September, marking the third consecutive month of factory deflation and the lowest since July 2016, NBS data showed Tuesday.
Shen Fan contributed to this report.
Contact Reporter Liu Jiefei (email@example.com)
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