On Wednesday, official economic data showed a slowdown in the decline in profits of industrial companies in China in May.
According to the New China News Agency (Xinhua), the total profits of Chinese industrial companies with annual revenues of no less than 20 million yuan (about 2.77 million dollars) amounted to 635.81 billion yuan in May, a decrease of 12.6 percent from the same month last year.
Year-to-May earnings also fell 18.8%, somewhat slower than the roughly 21% decline in the first four months of 2023.
At the same time, the decline in profits during the past month was less than the decline in last April, which was 18.2 percent annually.
Factory earnings data indicate continued economic pressures in the world’s second largest economy. As exports fell in May for the first time in three months, the industrial downturn worsened, and the continued decline in imports underscores the extent of weak domestic demand.
This comes as Chinese President Xi Jinping pledged his government’s commitment to the correct procedures towards foreign investors, confirming his government’s attempts to allay concerns about the economic situation and the unpredictable policymaking in China.
Chinese Prime Minister Li Qiang told delegates at the World Economic Forum summit in Tianjin, on Tuesday, that his country’s economic growth in the second quarter will exceed the first quarter, and is expected to reach five percent at the end of the year, according to the target.
China’s GDP growth was 3 percent last year, far from the official target of 5.5 percent, and is one of the slowest in four decades.
In 2023, the government has set the growth target at “approximately 5 percent.”
With industrial production slowing due to weak external and domestic demand, Li said, “We will take more practical and effective measures to boost domestic demand, revitalize the market, support coordinated development… and firmly promote opening up to the outside world.”
However, analysts cut their forecasts for Chinese economic growth for the rest of the year.
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