Chinese industrial profits faced sharp decline in May amid tariffs, deflation
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The news: China’s industrial firms were hit by the largest profit drop over the seven months to May amid US tariffs and broader economic pressures.
The numbers: Profits of industrial firms fell by 9.1% year-on-year in May, ending two months of consecutive gains.
In the first five months of this year China’s industrial profits have fallen 1.1% compared to the same period last year. Until the release of May data, industrial profits had been up 1.4% in the January-April period.
The mining sector led industrial profits down, falling 29% in the January-May period year-on-year. Miners and processors of coal and ferrous meals faced a steeper fall of at least 45%.
The context: China is facing deflationary pressure in part driven by price wars between electric vehicle manufacturers and a persistently weak demand in the property sector.
The sources: National Bureau of Statistics of China, Reuters, Bloomberg
