China's industrial profit growth swings back to decline in August

China's industrial profits swung back to a sharp contraction in August, official data showed on Friday, adding to a recent spate of bleak readings that point to mounting pressure on the economy.

Profits plunged 17.8 per cent in August from a year earlier following a 4.1 per cent increase in July, while earnings rose slower at 0.5 per cent in the first eight months compared with 3.6 per cent in the January-July period, according to the National Bureau of Statistics (NBS).

Sluggish data published earlier this month has exacerbated worries about an anaemic recovery, prompting global brokerages to revise down their 2024 China growth forecasts to below the official target of around 5 per cent.

Highlighting weak domestic demand, a key bottleneck for the economy amid job security anxiety and worsening slumps in property sales and investment, domestic dairy giant Inner Mongolia Yili Industrial Group Co posted a 40 per cent fall in second-quarter net profit.

To pump some much-needed optimism into the economy, China's central bank announced on Tuesday the most aggressive stimulus since the pandemic, including a 50-basis point cut on banks' reserve requirements.

But analysts warned more demand-side easing, especially fiscal help, would be vital to restore confidence.