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Time of India
2 days ago
- Business
- Time of India
Industrial profits dip again: China sees sharp fall in May; Donald Trump's tariffs, price wars add pressure
AI-generated representative image Industrial profits in China fell sharply in May, reversing a brief recovery and highlighting growing challenges in the world's second-largest economy. The decline reflects a slowdown in factory activity, mounting deflationary pressures, and persistent instability in trade relations with the United States. According to data released by the National Bureau of Statistics (NBS) on Friday, quoted by Reuters, industrial profits dropped 9.1 per cent year-on-year in May, ending two consecutive months of growth. The slide comes amid weak domestic demand and continued stress in the property sector. NBS statistician Yu Weining attributed the contraction to "insufficient effective demand, declining prices of industrial products and fluctuations in short-term factors." In the first five months of 2025, industrial profits fell 1.1 per cent from a year earlier, following a 1.4 per cent rise recorded in the January-April period. The downturn coincides with the steepest factory-gate deflation China has experienced in nearly two years, as well as continued declines in consumer prices. Despite isolated signs of resilience, such as an unexpected uptick in retail sales in April, economists suggest more policy support is needed to strengthen what remains a fragile recovery. ANZ senior China strategist Xing Zhaopeng noted that commodity tariffs imposed by US President Donald Trump have affected prices, while fierce domestic price competition has compressed manufacturers' margins. The automotive sector, in particular, has come under strain. Sustained high US tariffs and aggressive pricing strategies have led Chinese authorities to intervene, urging manufacturers to halt price wars. Automotive dealers have complained about excessive inventory pressure, stating that manufacturers are oversupplying dealerships, which is eroding profitability and forcing some outlets to shut down. Feng Jianlin, chief economist at Beijing FOST Economic Consulting, said, "The impact of overcapacity and falling prices on enterprises is still emerging, and efforts need to be made to adjust supply and stabilise demand." A sectoral breakdown of the data revealed that state-owned enterprises saw profits decline by 7.4 per cent in the January-May period, while private sector firms posted a slight increase of 0.3 per cent. Foreign enterprises registered profit growth of 3.4 per cent. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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First Post
2 days ago
- Business
- First Post
China's May industrial profits fall 9% amid economic stress & trade war with US
Amid slowing factory output, persistent economic stress, and ongoing trade war with the United States, Chinese industrial profits fell sharply in May by 9.1% compared to the same period last year. read more Robotic arms assemble cars in the production line for Leapmotor's electric vehicles at a factory in Jinhua, Zhejiang province, China, April 26, 2023. (China Daily via Reuters/File Photo) China's industrial profits swung back into sharp decline in May from a year earlier, as factory activity slowed in the face of broader economic stress and a fragile trade truce with the United States. Deepening deflationary pressures and a persistent property crisis continued to undercut demand and growth in the world's second-largest economy. A few signs, including an unexpected pickup in retail sales growth last month, suggested some resilience among households even though market consensus is that more policy support is required to bolster a fragile economic recovery. STORY CONTINUES BELOW THIS AD Profits at China's industrial firms fell 9.1 per cent in May from a year earlier, snapping a two-month growth streak, National Bureau of Statistics data showed on Friday. The profit decline was due to 'insufficient effective demand, declining prices of industrial products and fluctuations in short-term factors', said NBS statistician Yu Weining in a statement. Industrial profits slid 1.1 per cent in the first five months of 2025 from the same period last year. This compares with a 1.4 per cent increase in the January-April period. China's factory-gate deflation deepened to its worst level in almost two years last month while consumer prices extended declines. Prices took a hit from US President Donald Trump's tariffs on commodities, while domestic price wars hit gross margins, said Xing Zhaopeng, senior China strategist at ANZ. With US tariffs set to remain high, factories are facing immense strains, particularly in sectors such as autos where excessive competition has prompted an official call to end bruising price wars. Local auto dealers have appealed for automakers to stop dumping cars on dealerships, saying the intense price war was damaging their cash flow, driving down their profitability and forcing some to shut. STORY CONTINUES BELOW THIS AD 'The impact of overcapacity and falling prices on enterprises is still emerging, and efforts need to be made to adjust supply and stabilise demand,' said Feng Jianlin, chief economist at Beijing FOST Economic Consulting. Profits at state-owned firms dropped 7.4 per cent in the first five months. Private-sector companies recorded a 0.3 per cent increase and foreign firms saw a 3.4 per cent rise, according to a breakdown of the official data. Industrial profit numbers cover firms with annual revenue of at least 20 million yuan ($2.78 million) from their main operations. (This is an agency copy. Except for the headline, the copy has not been edited by Firstpost staff.)
RTHK
27-05-2025
- Business
- RTHK
NBS data shows China's industrial profits up 1.4pc
NBS data shows China's industrial profits up 1.4pc NBS data showed private sector companies and foreign firms enjoyed growth of 4.3 percent and 2.5 percent, respectively, over the first four months of the year. File photo: Reuters China's industrial profits picked up pace in April, official data showed on Tuesday. Industrial profits rose 1.4 percent year-on-year in the January-April period, according to data released by the National Bureau of Statistics (NBS). This compared with 0.8 percent growth over the first quarter. In April alone, profits rose 3 percent versus a 2.6 percent rise a month prior. "China's industrial policy priorities look to be working well," said Dan Wang, Eurasia Group's China director. "Commodities involved in new energy and new materials supply chains are doing well, as are those in high-end manufacturing." Profits at state-owned enterprises fell 4.4 percent over the first four months, the NBS data showed, while private sector companies and foreign firms enjoyed growth of 4.3 percent and 2.5 percent, respectively. Industrial profit numbers cover firms with annual revenue of at least RMB20 million from their main operations. "The foundation for stable profit growth still needs to be strengthened," Yu Weining, an NBS statistician, said in a note accompanying the data. "Challenges remain: global uncertainties, insufficient demand and falling prices continue to weigh on the recovery." (Reuters)
Business Times
27-04-2025
- Business
- Business Times
China March industrial profits rise, defying trade tensions
Profits at China's industrial firms rebounded in March, driven by a boost in income from the high-technology manufacturing sector and signalling economic resilience amid trade tensions with the US. Industrial profits rose by 2.6 per cent in March from a year earlier, taking the gain for the first quarter to 0.8 per cent, according to data released on Sunday (Apr 27) by the National Bureau of Statistics. Last month's data compares with a 0.3 per cent contraction for the first two months. A turnaround in industrial profit is regarded as critical in lifting business confidence, and encouraging companies to invest and hire, to help the Chinese government achieve its reiterated commitment to achieve around 5 per cent economic growth this year. High-technology focused manufacturers' profit rose 3.5 per cent in the quarter, reversing a 5.8 per cent decline in the first two months of the year. Almost three-fifths of industrial sectors recorded profit growth in March, according to the statement. China said on Friday that it will 'fully prepare' emergency plans to protect the nation against increasing external shocks as it defends its growth goals amid a deepening trade war with the US that is challenging the world's No 2 economy. The country's decision-making Politburo pledged to create new monetary and policy tools to boost technology, consumption and trade. Such steps could allow for faster deployment of low-cost credit for investment in targeted areas. 'Incremental and existing policies have worked in concert, enabling the industrial economy to get off to a good start,' NBS analyst Yu Weining said in a statement. 'At this stage, the external environment has become more complex and severe, with an increase in unstable and uncertain factors.' BLOOMBERG
CNBC
27-04-2025
- Business
- CNBC
China's first-quarter industrial profits return to growth amid tariff woes
China's industrial profits returned to growth in the first quarter, official data showed on Sunday, but are likely to come under further pressure amid a trade war with the United States. With Washington's aggressive tariffs threatening to hit China's crucial export engine hit and no time frame yet for any bilateral trade talks, economists and investors are waiting for the Chinese government to roll out more support measures to cushion the blow to the world's second-largest economy. Cumulative profits of China's industrial firms rose 0.8% to 1.5 trillion yuan ($205.86 billion) in the first quarter from a year earlier, the National Bureau of Statistics (NBS) data showed, reversing a 0.3% decline in the first two months. In March alone, profits rose 2.6% on-year. The profit gain in the first quarter followed a 3.3% fall in 2024, reversing the trend of continuous declines in cumulative profits of enterprises since the third quarter of last year, Yu Weining, an NBS statistician, said in a separate statement along with the data release. Thanks to a consumer goods trade-in campaign, profits in the wearable smart device manufacturing sector soared by 78.8% while those for household kitchen appliance makers rose 21.7%, said the statement. China reported stronger-than-expected economic growth in the first quarter as government stimulus boosted consumption and supported investment, but deflationary pressures persisted, ripping into corporate profits and workers' incomes as firms tried to navigate rising trade disruptions. "At the current stage, the external environment is becoming more complex and severe, and unstable and uncertain factors are increasing," said Yu, adding the government will further strengthen policy implementation and promote the continuous improvement of corporate profitability. Beijing has made increasingly louder calls on exporters to find local buyers as an alternative to the U.S. market, now effectively frozen after Washington hiked tariffs on Chinese goods by 145%, but many export-reliant factories have decried weak domestic demand, price wars, low profits and payment delays in the Chinese market. The ruling Communist Party's Politburo on Friday pledged to support firms and workers most affected by the impact of U.S. tariffs, also saying new monetary tools and policy financing instruments will be set up to boost innovation, consumption and foreign trade. Profits at state-owned firms dipped 1.4% in the first quarter. Private-sector companies saw a 0.3% fall, but foreign firms recorded a 2.8% gain, according to a breakdown of the NBS data. Industrial profit numbers cover firms with annual revenue of at least 20 million yuan from their main operations.
