PROFITS at China’s industrial firms declined in annual terms for the third consecutive month in October, tracking sustained drops in producer prices and exports and underscoring slowing momentum in the world’s second-largest economy.

Industrial profit fell 9.9 percent in October year on year to 427.56 billion yuan (US$60.74 billion), data released by the National Bureau of Statistics showed yesterday, marking the biggest drop since the January-February period and compared with a 5.3 percent decline in September.

China’s industrial sector has been under pressure in recent months as slowing demand at home and the fallout from the Sino-U.S. trade dispute undercut earnings.

Despite recent signs of progress in trade negotiations, there is still uncertainty about whether China and the United States can reach an agreement that would put off another U.S. tariff hike on Chinese goods scheduled to take effect Dec. 15.

U.S. President Donald Trump said Tuesday that China and the United States are close to agreement on the first phase of an agreement.

China’s producer price index, seen as key indicator of corporate profitability, fell by the sharpest rate in more than three years in October as prices for raw materials dropped. The country’s official manufacturing PMI also showed a contraction in activity for the sixth straight month in September as new export orders declining for the 17th month in a row.

China’s exports fell in annual terms for the third straight in October, albeit at a slower-than-expected rate.

For the January-October period, industrial firms’ profits fell 2.9 percent from a year earlier to 5.02 trillion yuan, compared with a 2.1 percent decline in the January-September period.

The central bank warned Monday of increasing downside risks for the economy as growth continues to falter despite various fiscal and monetary stimulus introduced this year.

Industrial firms’ liabilities increased 4.9 percent from a year earlier to 66.74 trillion yuan at the end of October, compared with a 5.4 percent increase at the end of September.

Private sector profits rose 5.3 percent in the January-October period, slowing from 5.4 percent for the January-September period.

The data covers firms with more than 20 million yuan in annual revenue from their main operations.(SD-Agencies)