China’s industrial profit widens drop on economy, deflation

FILE PHOTO: Workers install a Beijing 2022 emblem for a countdown clock to mark the number of days till the opening ceremony of the 2022 Winter Olympic Games, in Zhangjiakou, Hebei province, China May 8, 2019. REUTERS/Stringer

SHANGHAI: Profits at Chinese industrial enterprises continued to contract as the economy slows and factory deflation deepens.

Industrial profits dropped 5.3% in September, according to the National Bureau of Statistics on Sunday.

While industrial production picked up in September, growing deflationary pressure continued to weigh on corporate profits and their debt servicing ability. Companies’ earning power will likely remain depressed in the coming month amid weak demand.

"The larger slide in September was due to a faster decline in industrial product prices and a slower growth in sales, ” the bureau said in a statement released with the data. - Bloomberg