BEIJING (Reuters) – Profits at China’s industrial firms fell at the fastest pace in two years in April, as higher raw materials prices and supply chain chaos due to anti-coronavirus restrictions slashed profit margins and disrupted factory activity. Profits shrank 8.5 percent from a year ago, down from a 12.2 percent increase in March, according to Reuters calculations based on data released by the Office for National Statistics on Friday. The decline is the largest since March 2020. “In April, the emergence of COVID-19 hotspots spread to some regions, causing major shocks to the production and operations of industrial enterprises and lowering their profits,” Zhou Hong, chief statistician with the bureau, said in a statement. Zhou added that the eastern and northeastern regions affected by the coronavirus suffered a profit decline of 16.7 percent and 8.1 percent, respectively, in the first four months of the year. The auto industry sector cut manufacturing profits by 6.7 percentage points in April. Industries have been hit hard by the widespread draconian measures imposed to combat the Corona virus, which have led to the closure of factories, highways and ports. Industrial output in Shanghai, the country’s commercial hub, fell 61.5 percent in April amid a nationwide lockdown, a much steeper decline compared to a 2.9 percent drop nationwide. Profits of industrial firms grew 3.5 percent year on year to 2.66 trillion yuan ($395.01 billion) in the January-April period, down from 8.5 percent growth in the first three months, the statistics bureau said.
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