Profits of industrial companies in China fell sharply

The profits of industrial companies in China fell sharply in May due to contraction in demand.

The profits of China’s industrial companies fell 18.8 percent on-year in the first five months of 2023, according to data released today. May profits decreased 12.6 percent compared to the same month of the previous year.

The profits of foreign companies fell 13.6 percent in the first five months of the year. While the profits of private companies fell 21.3 percent, the profits of state-owned companies fell 17.7 percent.

ECONOMIC STRESS IS GROWING

The data underscored the ongoing economic stress in China, which is trying to enter a period of recovery. In May, exports fell for the first time in three months. The fall in imports continued and domestic demand remained weak.

It is believed that the fall in profits will continue to put pressure on the labor market. On the other hand, officials continue to express confidence in the economy, as Premier Li Qiang said yesterday that the 5 percent growth target is achievable.