China Industrial Profits Drop Persists Amid Deflation Risks

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A man takes a photograph in May 2021 of smoke and exhaust rising from a large industrial complex around a Liuzhou Iron & Steel facility in Liuzhou, South China’s Guangxi Zhuang autonomous region. Photo: Bloomberg

(Bloomberg) — China’s industrial profits fell at a slower pace in June, though worsening factory-gate deflation and slowing consumer spending continued to squeeze the margins of businesses.

Profits last month slid 8.3% from a year earlier, compared with a decrease of 12.6% in May, data published by the National Bureau of Statistics showed Thursday. For the first half of 2023, profits fell 16.8%, easing from the 18.8% drop in the first five months.