In August, this indicator decreased by 17.8% year-on-year
The total profit of large industrial companies in China in January-August this year increased by 0.5% year-on-year to 4.653 trillion yuan ($664 billion). This was reported by CNBC with reference to the National Bureau of Statistics (NBS).
In August, the profits of large Chinese industrial enterprises decreased by 17.8% y/y. This was the largest drop in more than a year. At the same time, in July, growth of 4.1% y/y was recorded, which was the fastest pace in 5 months.
The NBS, in particular, explained the August drop by a high comparison base. In August 2023, the indicator showed an increase of 17.2% y/y.
In January-August, the Chinese steel industry reduced profits by 4.7% year-on-year – to 5.233 billion yuan ($746 billion).
The profits of state-owned companies fell by 1.3% year-on-year over 8 months, while those of non-state enterprises increased by 2.6%. In January-August of this year, foreign industrial companies reported a 6.9% increase in profits compared to the same period last year.
On September 24, the Chinese central bank announced the most powerful package of financial incentives since the beginning of the coronavirus pandemic. In particular, it includes a 0.5 percentage point reduction in the reserve requirement ratio (RRR) for banks, which will free up approximately 1 trillion yuan ($142 billion) for new lending, as well as a reduction in the interest rate on seven-day reverse repurchase agreements to 1.5% from 1.7% per annum. Against this backdrop, iron ore prices are showing positive dynamics, but analysts are still cautious about further forecasts.
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