BEIJING (Reuters) – Earnings at China’s industrial firms shrank for a second straight month in December, putting pressure on policymakers to support industries hurt by slowing prices and weak factory activity amid a protracted U.S.-Sino trade war.
The downbeat data points to more troubles ahead for the country’s vast manufacturing sector already struggling with a decline in orders, job layoffs and factory closures as China’s economic growth slows to its weakest in nearly three decades.
China’s economy expanded 6.6 percent in 2018 and growth is set to slow further this year as Beijing’s efforts to reduce debt risks depress the property market and curb credit flows to the private sector, while a crackdown on pollution dents industrial activity.
Industrial profits in December fell 1.9 percent from a year earlier to 680.8 billion yuan ($100.9 billion), weighed down by weak factory-gate prices and soft demand, the National Bureau of Statistics (NBS) said on Monday. This is on top of a decline of 1.8 percent in November – the first contraction in profits in nearly three years.