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Technology China's industrial profits fall 5.3% in Sept as trade war toll mounts

07:40  27 october  2019
07:40  27 october  2019 Source:   reuters.com

China's trade with US shrinks as tariff war worsens

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Profits at China ' s industrial firms contracted for the second straight month in September as producer prices continued their slide, highlighting the toll a slowing economy and protracted U.S. trade war are having taken on corporate balance sheets.

Profits at China ' s industrial firms contracted for the second straight month in September as producer prices continued their slide, highlighting the toll a slowing economy Picture taken October 23, 2019. REUTERS/Stringer/File Photo. Industrial profits fell 5 . 3 % in September from a year earlier to 575.6

a group of people standing in front of a window: People stand near a window overlooking the financial district in Shanghai© Reuters/CHINA STRINGER NETWORK People stand near a window overlooking the financial district in Shanghai

BEIJING (Reuters) - Profits at China's industrial firms contracted for the second straight month in September as producer prices continued their slide, highlighting the toll a slowing economy and protracted U.S. trade war are having taken on corporate balance sheets.

Industrial profits fell 5.3% in September from a year earlier to 575.6 billion yuan ($81.48 billion), data released by the National Bureau of Statistics (NBS) on Sunday showed. That compared with a 2% decline in August.

China's vast industrial sector has come under pressure amid trade tensions and tit-for-tat tariffs with the United States. Profits have slowed visibly since the second half of last year, though the sector has seen some transitory rebounds as Beijing steps up support measures.

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BEIJING (Reuters) - Profits at China ' s industrial firms declined 5 . 3 % in September from a year earlier, the National Bureau of Statistics said on Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

China ’ s industrial profits have been softening since the second half of 2018 as the economy slowed and the U.S.- China trade dispute escalated, with many industrial firms putting off business decisions and scaling back manufacturing investment. Economic growth in the second quarter slowed to a near

The decline in profits contrasted with the slight improvement in the manufacturing sector in September, with factory surveys and better-than-expected industrial production growth pointing to a pick-up in domestic demand.

But factory gate prices, considered a key barometer of corporate profitability, fell at the steepest clip in more than three years as economic growth ground to a fresh near 30-year low in the third quarter.

For January-September, industrial firms earned profits of 4.59 trillion yuan, down 2.1% year-on-year, and worse than the 1.7% reading in the first eight months.

The drop was mainly due to factors such as a decline in the ex-factory price of industrial products and slowdown in sales growth, said Zhu Hong, a senior statistician with the NBS.

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China ' s industrial firms posted their worst slump in profits since late 2011 in the first two months of this year, data showed on Wednesday, as increasing The trade war with the United States has put a dent on factory activity, corporate earnings, business sentiment and overall consumption in a blow to

Profits earned by China ’ s industrial firms contracted in June after a brief gain the previous month, fueling concern that a slowdown in manufacturing from a bruising trade war will drag on economic growth. China ’ s industrial profits have been softening since the second half of 2018 as the economy

Profits for state-owned firms slipped 9.6 percent in the first three quarters of the year.

The most impacted sector was the oil, coal and other fuel processing industries, where profits fell 53.5 percent in the January-September period.

Profits for the non-ferrous, electrical machinery and equipment manufacturing and alcoholic beverages sectors all bucked the trend though, recording rising profits.

U.S. and Chinese trade negotiators are working on nailing down a "Phase 1" trade deal for their presidents to sign next month, as the world's two biggest economies try to end a more than a year-long trade war that has disrupted global trade.

China's economic growth is expected to slow to a near 30-year low of 6.2% this year and cool further to 5.9% in 2020, a Reuters poll showed, underlining the challenges faced by Beijing even as it steps up stimulus amid a bruising Sino-U.S. trade war.

Industrial firms' liabilities increased 5.4% from a year earlier to 66.49 trillion yuan at end-September, compared with a 5.0% increase in August.

Private sector profits rose 5.4% in January-September, slowing from 6.5% growth in the first eight months.

The data covers companies with more than 20 million yuan in annual revenue from their main operations.

($1 = 7.0647 Chinese yuan renminbi)

(Reporting by Ben Blanchard and Jenny Su; Editing by Lincoln Feast)

China maintains tariffs must be reduced for phase one trade deal with U.S. .
China maintains tariffs must be reduced for phase one trade deal with U.S."The Chinese side believes that if the two sides reach a phase one deal, tariffs should be lowered accordingly," ministry spokesman Gao Feng told reporters, adding that both sides were maintaining close communication.

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