Suffering among China’s old drivers of growth leveled off in September as industrial companies’ profits fell 0.1% year-on-year following a plunge in August of 8.8%, Reuters reported, citing new data from the National Bureau of Statistics. Industrial profits – covering large firms with annual revenue of over RMB20 million (US$3.15 million) – fell 1.7% in the first nine months of the year compared to the same period in 2014. Chinese firms, particularly those in heavy industry and inefficient state-owned enterprises, continue to struggle with high debt levels, with producer price deflation effectively raising their real debt repayment burden–a potential drag on growth as the country seeks to rely more on services and consumption.
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