China Industrial Profits Tumble 18.8% in First Five Months amid Sluggish Recovery from Pandemic

China’s industrial firms saw their profits drop sharply by 18.8% year-over-year in the first five months of 2023, according to data released on Wednesday, as the country struggles to recover from the COVID-19 pandemic.

China’s National Statistics Bureau (NBS) noted in a statement that this number was 1.8% lower than the country’s industrial profits from January to April.

According to the NBS, which publishes monthly figures infrequently, industrial earnings contracted by 12.6% in May compared to the same month a year earlier. In April, profits fell 18.2 percent.

Profits continued to decline as a result of a sluggish economy that was losing momentum on many fronts in May, including retail sales, exports, and real estate investment, while the rate of youth unemployment reached a new peak of 20.8%.

Premier Li Qiang said on Tuesday that China is on track to achieve its yearly growth target of roughly 5%, despite several major foreign banks having lowered their 2023 GDP growth estimates due to disappointing economic data.

In his keynote address at the World Economic Forum in Tianjin, Li Qiang stated that China would implement more effective policy measures to expand domestic demand.