China's industrial profits decline 1.1% in first 7 months of 2022

Profits at industrial firms in China fell in the first seven months of the year as the economy continued to grapple with Covid disruptions and an ongoing slump in the property sector.

Profits in the January-to-July period declined 1.1 per cent from a year earlier, the National Bureau of Statistics said Saturday. That compared with an increase of 0.8 per cent in June.

China’s economic slowdown deepened in July, with retail sales, industrial output and investment all missing economist estimates. Policy makers moved to bolster growth after the weak data, with measures including cuts to both one-year and seven-day lending rates and a further 1 trillion yuan ($146 billion) of funding largely focused on infrastructure spending.

Economists were relatively downbeat on the measures, as they likely won’t go far enough to counter the damage from repeated Covid lockdowns and the property market slump. They now expect China’s economy to grow by less than 4 per cent this year, according to the median estimate in a Bloomberg survey, well below the government’s target of “around 5.5 per cent.”