Chinese industrial profits fell to 1.5 % in July, as Beijing declines on price wars

China’s industrial profits decreased by 1.5 % from the previous year in July, representing a remarkable recovery after months of sharp declines, indicating Beijing against price wars that helped reduce pressure on the company’s profitability.

The decrease in profits in July narrowed after a decrease of 4.3 % in June and a 9.1 % decrease in May, as the government pledged tougher regulations for the penalty wars that affected the financial health of companies.

The profits in major industrial companies decreased by 1.7 % in the first seven months this year, according to it Data from the National Bureau of Statistics on WednesdayPartially withdrawal by the mining sector.

The profits in the mining industry decreased by 31.6 % from January to July of the previous year, while the manufacturing and facilities sector – for electricity, heat, gas and water supplies – Their profits witnessed improving 4.8 % and 3.9 % from last year, respectively.

The state -backed industrial companies witnessed their basic decrease by 7.5 % in the first seven months, while companies that have foreign investments as well as Chinese private companies have witnessed a 1.8 % increase in profits.

Yu Wining, a statistic in the Statistical Office, is a decrease in the narrower profit to Beijing’s policies aimed at recovering consumer price levels, which improved the profitability of companies.

The profits in the raw material manufacturing sector have flourished to increase 36.9 % over the previous year, compared to a loss of 5 % in June. Within that wide category, steel and oil refineries became profitable, while consumer commodity manufacturing companies continued to experience low profits.

“The early effects of the fight against the revolution began to appear, as it is clear from a slight increase in the margins of profit,” said Tianges Show, chief economist in the Economic Intelligence Unit.

The “engagement”, known as “Neijuan”, refers to excessive competition that suffers from the Chinese economy, and often leads to price wars.

China is expected to issue the official manufacturing managers index in August later this week, with economists surveyed by Reuters expecting the main measure in the factory activity to stay in the Al -Ankasa area for the fifth consecutive month.

Goldman Sachs predicts a special survey, which is the Ratingdog China Manufacturing PMI, previously known as Caixin Manufacturing PMi, to return to 50 in July, which separates the expansion of shrinkage, from 49.5 in July, on the back of stronger export growth growth.

Industrial profits act as a main measure of financial health for factories, mines and utilities, which affects their investment plans in the coming months.

The factory portal deepened in June and July, and decreased His worst level in two years The slow domestic demand increased the extra pressure in the country.

Beijing has climbed efforts to stimulate local demand and reduce aggressive prices. But analysts believe that they are unlikely to repeat the sharp recovery in producers’ prices After fixing the offer side a decade ago.

“The campaign to combat the revolution is political as much as the senior economic leaders (AS) want to prove that they are sensitive to the problems suffering from companies and investors, even if the actual policy responses are very gradual,” said Gabriel Wildo, the administrative director of the consulting company at TENEO.

“It is likely that the shrinkage or inflation (most likely) will continue until the pressure of the market presses the unification of the industry and the exit of non -competitive companies,” Weldo added.