When Will the Recovery of China's Economy Begin? Industrial Profits Down 18.8% from January to May

The recovery of China's manufacturing sector is being delayed due to sluggish domestic demand and a slowdown in the global economy.

According to the National Bureau of Statistics of China (NBS) on the 28th, industrial profits in China from January to May decreased by 18.8% compared to the same period last year. Although this decline is somewhat improved compared to the cumulative figure until April (20.6%), it still has not recovered to the levels of previous years.

China's industrial profits indicate the profitability trends of enterprises in the industrial sector with annual sales of over 20 million yuan (approximately 3.6 billion KRW). The National Bureau of Statistics of China releases cumulative figures from the beginning of the year to the relevant month when announcing monthly industrial profit trends, and monthly figures are only occasionally disclosed.

On the same day, the National Bureau of Statistics announced that industrial profits in April and May decreased by 18.2% and 12.6%, respectively. Profits of foreign enterprises decreased by 13.6% year-on-year from January to May. Private enterprises recorded a decline of 21.3%, and state-owned enterprises decreased by 17.7%.

Bloomberg reported, "The decline in profits will continue to weigh on already deteriorating business sentiment," but added, "However, officials still express confidence in the economy."

Earlier, Li Chang, Premier of the State Council of China, predicted that China could achieve a GDP growth target of around 5% this year. Premier Li, speaking as the keynote speaker at the opening ceremony of the Summer World Economic Forum (WEF) Annual Meeting (Summer Davos Forum) held in Tianjin, China on the 27th, explained, "The second quarter will grow faster than the first quarter this year," and expressed hope that "the growth target for this year can be achieved."