China August industrial profits fall 8.8% y-o-y

Group of workers at a small parts manufacturing factory in China.
Mick Ryan | Getty Images
Group of workers at a small parts manufacturing factory in China.

Profits earned by Chinese industrial companies declined 8.8 percent in August from a year earlier due to rising costs and persistent falling prices, official data showed on Monday, adding to signs of weakness in the world's second largest economy

Also hurting firms was the stock market slump, which pushed down their investment returns while yuan fluctuation increased companies' financial costs in August, the National Bureau of Statistics (NBS) said.

During August, profits of industrial companies suffered the biggest annual fall since the NBS began monitoring such data in 2011.

For the first eight months of this year, profits were down 1.9 percent from
the year-earlier period, according to the NBS.

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The bureau said firms were squeezed by rising costs and falling prices with profits falling more quickly in August than in July. In total, August profits were down 156.6 billion yuan ($24.59 billion) from a year earlier.

The NBS said investment returns for industrial companies from a year earlier increased by 4.12 billion yuan in August, compared with a 11.04 billion yuan gain in July.

Financial payments of industrial firms' increased by 23.9 percent in August from a year earlier, compared to a 3 percent year-on-year drop in July.

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A plunge in China's stock market over the summer and a surprise devaluation in the yuan have roiled global markets, and raised doubts inside and outside China over Beijing's ability to manage its economy.

Among 41 industrial sectors, 31 sectors had year-on-year growth of profit in the first eight months of this year, while 10 recorded drops, the NBS said.