On December 30, 2022, a textile factory in Jiangxi Province. China’s manufacturing activity contracted at its sharpest pace in nearly three years in December.
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Data from the National Bureau of Statistics show that China’s industrial profits fell the most since the epidemic in September National Bureau of Statistics This is emerging as the country’s economy is plagued by slow growth, lack of demand and a housing crisis.
Wind information data shows that after falling 17.8% in August, industrial profits fell by 27.1% in September, the largest decline since March 2020, when it fell by 34.9%.
The database excludes data from most of 2022, the year when Shanghai and other parts of China implemented strict Covid-19 measures that limited business activity.
In recent weeks, Chinese authorities have stepped up measures to boost economic growth. China’s National People’s Congress is scheduled to hold a meeting early next month, and is expected to announce details on specific matters after the meeting.Much-anticipated fiscal stimulus.
Shan Hui, chief China economist at Goldman Sachs, said in a report on Sunday that the release of the data “highlights the need for stronger policy responses amid weak domestic demand and deflationary pressures.”
From January to September, industrial profits fell by 3.5% compared with the same period last year. Yu Weining, statistician of the National Bureau of Statistics It said “lack of demand and sharp declines in producer prices” were dragging down the profitability of industrial companies.
Data released earlier this month showed that Producer price index fell 2.8% Significant annual growth in September A decrease of 1.8% from the previous month.
Gary Ng, senior economist at Natixis, said in an email to CNBC that “weak industrial profits indicate a greater need for demand-side policies in China.”
“While there are differences across industries, upstream materials and automobiles are particularly under pressure,” he said.
Chinese economy Growth in the third quarter was 4.6%the slowest growth rate since early 2023. Beijing has set a target of economic growth of about 5% in 2024.
The country will release its official manufacturing purchasing managers’ index for October on Thursday.
Economists polled by Reuters expected the number to reach 50.1 after five months of contraction. The PMI was 49.8 in September, 49.1 in August, 49.4 in July, and 49.5 in June. A reading above 50 indicates an expansion in economic activity, while a reading below that level indicates a contraction.
