China’s industrial profit growth slowed in June, because the country’s economy will weaken, rising costs, and the price of goods down because demand is growing moderately.
Based on data released by the Bureau of Statistics of China, on Friday (26/07/2013) net income of Chinese companies rose 6.3 percent (year on year / yoy) to 502.4 billion yuan (82 billion U.S. dollars, or Rp 820 trillion) . Growth is lower when compared to the previous month to reach 8.8 percent.
Stock markets in China also fell for the third time on the same day, in response to low growth in manufacturing, after the Chinese government reduce its 19 capacity to trim excess supply causes the price to drop.
At the same time, China’s National Council has also offered limited support through acceleration of railway construction, tax cuts for small businesses and cut export costs.
“In terms of policy, the most obvious thing is there is no economic stimulus package in China,” Zhu Haibin, an economist at JPMorgan Chase & Co., Which is based in China.
According to him, the Chinese government is now trying to formulate fiscal policy to be more effective at reducing the administrative expenditure.
Meanwhile, on the monetary side, the Chinese central bank is trying to boost credit directly channeled to the real sector.