China's industrial enterprises posted a bigger drop in their profits in August, the steepest slide this year, as corporate earnings were weighed down by the continued downturn in the world's second largest economy.
Profits of the country's major enterprises slumped 6.2 percent to 381.2 billion yuan ($60.47 billion) in August compared to a year earlier, the fifth straight month of decline, the National Bureau of Statistics said in a statement on its website Thursday. The drop is bigger than July's 5.4 percent slide.
In the first eight months of the year, the combined industrial profits went down 3.1 percent from a year ago to 3.06 trillion yuan, larger than the fall in the first seven months of 2.7 percent.
The monthly indicator of the country's industrial sector covers enterprises with more than 20 million yuan in annual revenue.
"The larger decline in industrial profits signals that there will be no quick recovery in the economy," said Tang Jianwei, senior macroeconomic analyst at Bank of Communications in Shanghai.
The gloomy industrial profit reading following a raft of sluggish economic indicators released earlier this month serves to reinforce market expectations for more pro-growth policies, but economists are less optimistic about a new round of stimulus package to revive the economy.
"Another spending spree that has recently made headlines is mostly about local governments' investments planned over the medium and long term, fundraising for which remains a problem," Tang said, noting the move won't give a strong boost to the economy for the moment.
The National Development and Reform Commission has approved multiple projects since May, which would require an investment of 7 trillion yuan, Wei Jie, a professor at Tsinghua University, noted at a forum in Shanghai last week.
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