Shanghai: In July, China’s industrial firms’ profits went down, which was the opposite of what had happened in the previous months. This was because new COVID-19 restrictions hurt demand and squeezed factory margins, and heatwaves caused power outages that threatened production.
The National Bureau of Statistics said on Saturday that China’s industrial profits fell 1.1% from January to July compared to the same time last year. This erased the 1.0% growth that was seen in the first six months.
The bureau did not release separate data for July.
New COVID rules made it harder for factories in big manufacturing cities like Shenzhen and Tianjin to make things and do business during the month.
China’s industrial output growth slowed to 3.8% on an annual basis in July, down from 3.9% in June.
Since the middle of July, China’s huge Yangtze River basin has been hit by heatwaves that have pounded densely populated cities from Shanghai to Chengdu.
According to the statistics bureau, industrial firms’ liabilities increased 10.5% from a year ago in July, matching the 10.5% increase seen in June.
China’s economy almost shrunk in the three months leading up to June because of tight COVID control restrictions and a troubled property market, which hurt demand.
Attempting to bolster the faltering economy, policymakers are increasing infrastructure spending.
The industrial profit data includes big companies whose main business brings in more than 20 million yuan ($3 million) a year.