Female workers make down jackets at a factory in Guangshan county, Central China's Henan Province on Thursday. The local down feather industry supports a workforce of over 120,000 people, with annual sales reaching more than 7 billion yuan ($1.09 billion). Photo: cnsphoto

The growth rate of industrial profits for Chinese enterprises above the designated size slowed for a sixth consecutive month in August, the National Bureau of Statistics (NBS) announced on Tuesday. Analysts said that domestic industrial production remains stable, but challenges remain. 

In August, the profits of industrial enterprises hit 680.28 billion yuan ($105.39 billion), an increase of 10.1 percent on a yearly basis, the NBS said, marking the sixth consecutive decline.

Industrial output was steady in August while business continued to improve, with profits maintaining stable growth despite the impact of regional COVID-19 flare-ups and summer floods, Zhu Hong, a senior statistician at the NBS, said on Tuesday. 

However, Zhu noted that challenges remain, since there are still sporadic coronavirus cases across the country. Surging bulk commodity prices, high international logistics costs and chip shortages are still driving up production costs, Zhu said.

Power restrictions have become a major challenge for industrial enterprises to remain profitable, Tian Yun, former vice director of the Beijing Economic Operation Association, told the Global Times on Tuesday. 

Local authorities across the country implemented restrictions on power use in order to achieve the nation's dual carbon goals, while the demand for energy is still strong. 

Multiple provinces and regions across China have recently implemented power rationing.

Meanwhile, the recovery of domestic consumption has not fully met market expectations, said Tian. 

Dong Dengxin, director of the Finance and Securities Institute of Wuhan University, said that due to the improvement in production late last year, it is normal to see year-on-year growth rates slow now.

Global Times