On September 27, 2024, a large number of mechanical vehicles were ready for departure at the dock of Lianyungang Oriental Port Branch in Lianyungang, China.
Cost Photos | Noor Photos | Getty Images
China’s industrial profits fell 10% year-on-year in October, another sign that Beijing’s stimulus measures have yet to reverse the decline in corporate profits.
This marked the third consecutive month of profit decline, after Annual increase of 27.1% It plummeted in September, the largest drop since March 2020.
From January to October, the profits of industrial enterprises above designated size nationwide decreased by 4.3% annually. The National Bureau of Statistics said in a statement on Wednesday. that is with down 3.5% throughout September.
The National Bureau of Statistics attributed the narrower decline in October to the implementation of Beijing’s stimulus measures. Yu Weining, a statistician at the National Bureau of Statistics, said that the profitability of most industries has improved from the previous month, especially driven by equipment and high-tech manufacturing.
“The slowdown in the decline in industrial profits reflects that China’s economic conditions are gradually stabilizing, albeit from a low base,” said Eugene Hsiao, head of China equity strategy at Macquarie Capital, adding that this The trend is consistent with “a degree of… demand deficiency” as local exporters rush to ship to the U.S. ahead of expected higher tariffs.
He expects Beijing’s further fiscal support next year to have a more meaningful impact on boosting corporate profits.
From January to October, profits of state-owned enterprises fell by 8.2%, and profits of private enterprises fell by 1.3%.
The profits of foreign-invested industrial enterprises, including businessmen from Hong Kong, Macao and Taiwan, increased by 0.9% year-on-year from January to October.
Recent data shows Beijing’s latest stimulus measures have helped parts of the economy but are not enough to offset ongoing deflationary pressures.
Chinese Consumer price index rises in October Slower than expected, Up slightly by 0.3% Compared with a year ago, this was the slowest growth since June. At the same time, the producer price index fell by 2.9% year-on-year, indicating that deflation further deepened from the 2.8% drop last month.
the country’s Industrial production growth also slowed Better than expected. Among fixed asset investments, real estate investment fell by 10.3% as of October, which was greater than the 10.1% decline in September.
October, the bright side Retail sales beat expectations The annual increase was 4.8%, and the unemployment rate fell to 5% from 5.1% in September.
The world’s second-largest economy grew at its slowest pace in the third quarter since early 2023 due to sluggish domestic consumption and a protracted slump in the real estate market.
Since late September, Chinese authorities have stepped up stimulus efforts to boost the faltering economy and achieve the government’s growth target of “around 5%”.
China is scheduled to release its official manufacturing purchasing managers’ index for November on Saturday. According to a Reuters poll of economists, the official PMI is expected to be 50.3, slightly higher than October’s 50.1.
A reading above 50 indicates an expansion in economic activity, while a reading below that level indicates a contraction.
—CNBC’s Evelyn Cheng contributed to this report.
