BEIJING, June 27 (Reuters) – China’s industrial profits grew more slowly though still at a double-digit pace in May, highlighting a widening divide in an economy leaning on factory output and overseas shipments to counter soft domestic demand.
Economic growth remains fragile, hobbled by a prolonged property downturn and deep structural imbalances that continue to weigh on domestic activity. Meanwhile, companies seeking to escape intensifying competition at home face fresh uncertainty from the protracted Iran conflict.
Profits at the country’s industrial firms in May rose 21.1% from a year earlier, easing from a 24.7% jump in April, data from the National Bureau of Statistics (NBS) showed on Saturday.
Profits for January-May climbed 18.8% over the corresponding period last year versus an 18.2% increase in the first four months.
Earnings trends have diverged sharply across sectors. Profits of manufacturers of computers, communication and electronic equipment soared 103.9% in January-May, buoyed by a global AI investment boom. By contrast, profits of automakers dropped 19.8% despite robust exports.
Analysts expect policymakers to step up targeted support to stabilise corporate profitability, particularly as consolidation accelerates in sectors grappling with overcapacity and cut-throat competition.
Industrial profit figures cover firms with annual revenues of at least 20 million yuan ($2.95 million) from their main operations.
($1 = 6.7783 Chinese yuan)
(Reporting by Qiaoyi Li, Ellen Zhang and Ryan Woo; Editing by Jacqueline Wong)
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