China’s industrial firms saw their profits drop last month for a fourth straight month, on track for the sharpest annual decline since records began in 2000.
Industrial profits at large Chinese companies fell 7.3 percent last month compared to a year earlier, the National Bureau of Statistics said in a statement yesterday. That compares with a Bloomberg Economics forecast for a decline of about 6 percent.
While easing from the double-digit declines in the three previous months, the drop deepened a slide in profits this year to a 4.7 percent decrease over the first 11 months, putting the year on track to be the worst on record for industrial businesses.
Photo: AFP
The results suggest Beijing’s most extensive efforts to revive the economy since the pandemic have had a limited effect in lifting demand. Industrial profits are a vital gauge of the financial health of factories, mines and utilities, shaping their investment decisions in the months to come.
Yu Weining (于衛寧), an NBS statistician, credited the recent stimulus measures for narrowing the profit declines, citing improvements in mining and manufacturing sectors.
“As policies continued to take effect, industrial profits continued to narrow the decline and efficiency improved,” Yu said, adding that the government would further implement pro-growth measures announced at the recent Central Economic Work Conference in Beijing.
A program to subsidize upgrades of household appliances and business equipment boosted profits in the relevant sectors, the NBS said, adding that manufacturers of household cleaning appliances saw profits rise 311.4 percent last month.
Corporate finances have come under pressure as China contends with weak domestic demand and its longest stretch of deflation since 1999. Producer prices remain depressed, and retail sales were weaker last month.
While signs of a tentative recovery have emerged, and China is expected to hit its growth target of about 5 percent this year, new challenges are arising as US president-elect Donald Trump prepares to take office next month.
Trump’s threat of steep tariffs on Chinese goods would further disrupt the country’s export sector, which is already facing increased trade barriers from places such as the EU.
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