China's industrial companies' profits fall on shrinking demand

Profits at Chinese industrial firms fell 12.6 percent in May from a year earlier. The shrinking demand was interpreted as an indicator of the country’s ongoing economic slowdown. Profits at Chinese industrial firms continued to fall in May due to shrinking demand. According to data released by China’s National Bureau of Statistics on Wednesday, profits fell 12.6 percent in May from a year earlier. Corporate profits also fell 18.8 percent in the January-May period. Exports fell for the first time in three months in May, worsening industrial deflation. Meanwhile, profits at foreign firms slowed slightly to 13.6 percent in the first five months of the year compared with the January-April period. The continued decline in imports shows how weak domestic demand is. Meanwhile, profits at private companies fell 21.3 percent, while profits at state-owned enterprises fell 17.7 percent. The falling profits are expected to continue to weigh on business sentiment, which is already falling. In addition, shrinking demand is interpreted as an indicator of ongoing economic stress in China, where recovery is giving warning signs.