China’s industrial profits shrink in April, Latest Business News - The New Paper

China’s industrial profits shrink in April

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BEIJING: Profits for China's industrial companies shrank in April as slowing manufacturing activity halted the previous month's surge, putting more pressure on policymakers to step up support for an economy hit by a bitter trade war with the US.

Earnings at China's key manufacturing sector have been falling since last November, with the exception of March, as both domestic and global demand slackened.

Industrial profits dropped 3.7 per cent year on year to 515.4 billion yuan (S$103 billion) last month, partly due to a high base of comparison in the previous year, according to data published by the National Bureau of Statistics of China yesterday.

That compared with a 13.9 per cent surge in March, the biggest gain in eight months.

The bureau said in a statement that the March results benefited from companies buying industrial goods ahead of a value added tax cut. The companies then scaled back on purchases in April in a blow to profits.

For the first four months, industrial companies notched up profits of 1.81 trillion yuan, down 3.4 per cent from a year earlier, compared with a 3.3 per cent drop in the first quarter this year.

The contraction in profits was in line with the weak growth in industrial output in the January-April period.

Weak fixed asset investment stoked worries about demand as have new factory orders, which remained sluggish last month, while exports have declined on a fall in shipments to the US. - REUTERS