Chinese industrial profits fall to lowest level on record

Profits at Chinese industrial firms fell by 8.8 per cent in August compared to a year earlier, the largest decline on record.

Data out of Beijing's official statistics agency showed Monday that the decline in profitability was the largest drop since the country started publicly releasingthat data in October2011.

The agency citedrising costs and falling prices for the drop-off. Lower prices are a global phenomenon, but rising costs are a particular problem in China right now because of the devaluation of the country'scurrency. Investment bank Nomura noted that the yuan has declined by 23 per cent during the period, which eats into profits even if a company is able to sell the same amount.

"The RMB increased financing costs of external-oriented enterprises," the bank said.

Mining company profits in China haveplungedby almost two thirds since January. Energy companies fared little better, withoil and gas profits tumbling67per cent.

State-owned firms fared especially poorly, with profits down24.7 per cent. Private companies, meanwhile, eked out a small growth of seven per cent, but their ranks are not very large.