July's 2.7% decline in earnings drives Shanghai index to 41-month low
Chinese industrial companies' profits in July fell by the most this year in a further sign of slowdown in the world's second-largest economy.
Industrial companies' profits in the first seven months of the year declined 2.7 percent to 2.7 trillion yuan ($425 billion), the National Bureau of Statistics said in a statement on Monday.
That compares with a 2.2 percent drop in the first half of the year and a 28.3 percent gain in the same period in 2011.
In July, the profits of companies in 41 sectors were 366.8 billion yuan, down 5.4 percent year-on-year, the fourth consecutive monthly fall, according to the bureau. The fall was 1.7 percent in June and 5.3 percent in May.
The latest data add pressure on the government to step up policy easing to reverse a slowdown that may extend into a seventh quarter.
During an inspection tour of Guangdong province last week, Premier Wen Jiabao said difficulties in stabilizing the expansion are "still relatively large" and called for measures to promote export growth to help meet the country's annual economic targets.
The country's benchmark stock index tumbled the most in six weeks by the close on Monday, after the bureau published the figures, showing investors' concern about the gloomy economic outlook.
The Shanghai Composite Index sank 1.7 percent to 2055.71 at the close, a 41-month low.
It retreated 1.1 percent last week and has fallen 6.3 percent this year, as the government kept strict controls on the property market, and the expansion of the manufacturing industry nearly stagnated.
Among the 41 sectors, 15 saw profits decline from a year earlier while 25 increased their net income in July.
State-owned companies made 784.7 billion yuan in net income during the first seven months, 12.2 percent less than that a year earlier, said the bureau. The private sector achieved 818.7 billion yuan in profits, up by 15.5 percent year-on-year.
