China's industrial profits plunge by 17.8% in August from a year ago

China's industrial profits plunged by 17.8% in August from a year ago in their largest decline in more than a year, National Bureau of Statistics data showed Friday.

That followed a 4.1% year-on-year increase in July, the fastest pace in five months. Industrial profits data covers factories, mines and utilities in China.

The 17.8% drop was the steepest since an 18.2% drop in April 2023, according to official data accessed through Wind Information.

The statistics bureau attributed the large decline in August to a high base in the year ago period. In August 2023, the same monthly figure expanded 17.2% from a year ago.

The drop dragged down industrial profits for the year. In the first eight months of the year, profits at large industrial firms grew by 0.5% to 4.65 trillion yuan ($663.47 billion), compared with a 3.6% increase in the first seven months.

"There is a long-running decline in China's industrial profits which can only get worse with Beijing failing to address its overcapacity problem," Shehzad Qazi, chief operating officer at China Beige Book, a U.S.-based research firm, said in an email.

He expects the country to double down on exports manufactured goods, from electric cars to steel, to drive economic growth.

During that eight-month period, the mining and oil industries saw the biggest profit decline. Smelters and processors of metals other than iron saw the largest profit gains during that time.

Also reporting significant profit gains for the period were electronic equipment manufacturers and the food processing industry, the statistics bureau said.

State-owned firms recorded a 1.3% decline in profits in the first eight months of the year, while non-state-owned businesses saw profits climb by 2.6%.

Foreign industrial