BEIJING: China's industrial firms posted their worst slump in profits since late 2011 in the first two months of this year, data showed on Wednesday , as increasing strains on the economy in the face of slowing demand at home and abroad took a toll on businesses.
The drag was mainly due to price contractions in key industrial sectors such as auto, oil processing, steel and chemical industries, Zhu Hong of the statistics bureau said in a statement accompanying the data, adding that production and sales are slowing as well. Growth in China's manufacturing output slumped to a 17-year low in January-February, while factory-gate inflation remained subdued in the same period in a reflection of the deepening strains across the economy.
"I advise the government to further lower value-added tax, and if implemented, it will effectively boost the profit-making ability of the manufacturing industry," said Li.