China's industrial wane follows PetroChina

BEIJING, Aug. 28 (UPI) -- China reported poor performance from major industrial firms as its major oil company, PetroChina, posts a 63 percent drop in its first half profit.

The National Bureau of Statistics reported Friday profits from major industrial firms were off 2.9 percent year-on-year in July, down from the year-on-year decline of 0.3 percent reported for June.

China's economy is slowing from double-digit growth, but still expected to grow at around 6 percent of gross domestic product. Nevertheless, a series of steep declines in the Shanghai Composite Index forced the government to infuse cash into the market, cut the value of the national currency and lower key interest rates in an effort to maintain positive momentum.

Industrial profit declines were attributed to weakness in Chinese demand and a steady drop in the real cost of manufactured goods, which the NBS said was off for 41 consecutive months.

PetroChina, the country's largest oil and gas production, said first half profits were down 63 percent from last year, with marketing activity taking one of the larger blows from the weak commodity market.

In its report, the company described the first half of the year as "challenging" given the "the intensified downward pressure on the domestic economy."

Nevertheless, PetroChina reported a 3.6 percent increase in domestically processed crude oil and a 3.2 percent increase in consumption of refined products. Crude oil production increased 2.6 percent when compared with the same period in 2014.

"The mild recovery of the global economy will remain highly uncertain in the second half of 2015 and the supply in the international oil market will continue to be sufficient," the company said in a statement. "It is expected that the domestic economy will continue to develop at a reasonable pace, while downward pressure on the economy still exists."