# China July industrial profits down as COVID curbs, heatwaves hit
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-29
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: China industrial profit falls
Meta Description: Discover how China's industrial profits plunged 1.1% in July due to COVID-19 restrictions, heatwaves, and power shortages. Learn more here.
URL: https://financedigest.com/china-july-industrial-profits-down-as-covid-curbs-heatwaves-hithtml

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SHANGHAI (Reuters) -Profits at China’s industrial firms sank in July, reversing previous gains as fresh COVID-19 curbs dragged down demand and squeezed factory margins, while power shortages due to heatwaves threatened production.

Profits at China’s industrial firms fell 1.1% in January-July from a year earlier, wiping out the 1.0% growth logged during the first six months, the National Bureau of Statistics said on Saturday.

The bureau did not report standalone figures for July.

Factory production and activities in major manufacturing hubs like Shenzhen and Tianjin were hit in the month as fresh [COVID curbs](https://www.financedigest.com/were-going-to-be-free-chinese-cheer-as-covid-curbs-are-loosened.html "‘We’re going to be free’: Chinese cheer as COVID curbs are loosened") were imposed.

In July, [China’s industrial output growth slowed](https://www.financedigest.com/swiss-gold-exports-to-china-slow-but-shipments-to-turkey-surge.html "Swiss gold exports to China slow but shipments to Turkey surge") to 3.8% on-year from 3.9% in June.

Searing heatwaves have swept across [China’s vast Yangtze River basin since](https://www.financedigest.com/worst-flooding-since-1998-leaves-33bn-economic-toll-in-china-according-to-aon-catastrophe-report.html "Worst flooding since 1998 leaves bn economic toll in China, according to Aon catastrophe report") mid-July, hammering densely populated cities from Shanghai to Chengdu.

Liabilities at [industrial firms jumped 10.5% from a year](https://www.financedigest.com/2022-the-year-that-facial-recognition-will-lead-the-fintech-industry.html "2022 – The year that facial recognition will lead the fintech industry") earlier in July, matching the 10.5% increase in June, the statistics bureau said.

China’s economy narrowly escaped contraction in the three months to June, as strict [COVID control restrictions and a distressed property sector pummelled demand](https://www.financedigest.com/merck-kgaa-expects-2023-profit-to-slip-as-covid-demand-wanes.html "Merck KGaA expects 2023 profit to slip as COVID demand wanes").

Policymakers are striving to prop up the flagging economy by doubling down on infrastructure spending.

The industrial [profit data covers large firms](https://www.financedigest.com/pizza-firm-dp-eurasia-delivers-profit-rise-evaluating-russian-business.html "Pizza firm DP Eurasia delivers profit rise, evaluating Russian business") with annual revenues of over 20 million yuan ($3 million) from their main operations.

($1 = 6.8715 Chinese yuan renminbi)

(Reporting by Josh Horwitz and Gao Liangping; Editing by William Mallard)


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