China's industrial profit growth slows further in May

BEIJING - The profits of China's major industrial firms rose 3.7 percent year on year in May, 0.5 percentage points lower than the rise recorded in April, official data showed on Monday.

The profits of industrial companies with annual revenues of more than 20 million yuan ($3.1 million) totaled 537 billion yuan last month, the National Bureau of Statistics (NBS) said.

From January to May, the profits of those firms rose 6.4 percent year on year, slightly lower than the rise recorded in the first four months.

He Ping, an official with the NBS Department of Industry, attributed the slower growth to milder growth of sales and weaker profitability of sectors including petrochemical processing, electronics and tobacco.

In May, the businesses' sales revenue increased 19.7 percent from a year ago, marking a retreat of 36.5 percentage points.

Meanwhile, rebounding oil prices cut the profits of oil processors. Falling tobacco output resulted in tobacco producers earning less than before.

In the first five months, state-owned enterprises' profits fell 7.3 percent, while those of foreign-invested companies increased 6 percent. Private businesses' profits rose 9.4 percent.

China's GDP expanded in the first quarter by 6.7 percent, the slowest reading since the global financial crisis in early 2009.

Financial authorities have predicted that China's economy will follow an L-shaped path as downward pressures weigh and new growth momentum has yet to pick up.

Economists have cautioned the investment boom will not persist, and consumer spending has shown risks. Wage growth lags behind GDP growth, and exports will not bottom out until the second half of 2017.