Industrial profit growth slows

China's industrial enterprises posted weaker profit growth in June, official data showed Saturday, signaling a continuing slowdown in the world's second largest economy.

The profits of major industrial enterprises with annual revenues of more than 20 million yuan ($3.26 million) grew by 6.3 percent year-on-year in June to 502.42 billion yuan, a decrease of 9.2 percentage points compared with the May reading, the National Bureau of Statistics (NBS) said Saturday in a statement on its official website.

Profits generated from the main business activities of these enterprises amounted to 476.89 billion yuan in the same month, down 2.3 percent year-on-year and contrasting with a growth rate of 8.8 percent in May. May was the first time the NBS added the indicator of profits from main business activities to its monthly industrial profit report.

"Since side businesses may also bring a lot of profit these days, the new indicator is now included to better reflect the operating results of industrial manufacturing," Yu Fenghui, a senior official at the Agricultural Bank of China, told the Global Times Sunday.

In a report published on the NBS website Saturday, NBS official He Ping wrote that several factors contributed to the relaxation of profit growth for industrial producers in June. For instance, industrial companies saw their main business revenues grow at a slower pace last month, while their cost per 100 yuan of revenue climbed month-on-month.

Data from the NBS also showed that in the first six months, profits of these industrial enterprises rose by 11.1 percent year-on-year to 2.58 trillion yuan, down from 12.3 percent growth from January to May. Their main business activities registered a 7.2 percent growth during the same period, a drop of 4.2 percentage points compared with the first five months.

"The latest figures are in accordance with China's macroeconomic situation, which is still characterized by continuing slowdown," Yu noted.

"And because of the economic downturn, industrial overcapacity continued to weigh on domestic factories and affect their operating results over the past several months," Yu said.

By the end of June, the value of industrial goods inventory totaled 3.15 trillion yuan, up 7.2 percent year-on-year.

In breakdown, private industrial enterprises posted the strongest profit growth in June, with their combined profits up 15.8 percent year-on-year in the first half to 799.94 billion yuan. State-owned and State-held enterprises reported profit growth of 4.8 percent during the same period, while overseas-invested enterprises reported 14.8 percent profit growth.