Official data released on Friday showed that China’s industrial profits fell 7% in November, but the figure was slightly better than October for an industry with weak domestic demand.
Weak household demand has hit the world’s second-largest economy, which has been struggling for a strong post-pandemic recovery amid a protracted housing downturn and new trade risks from the incoming Trump administration.
Statistics Bureau data showed that industrial profits fell by 7.3% year-on-year in November, following a 10% drop in October.
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Zhou Maohua, a macroeconomic researcher at China Everbright Bank, said the narrower decline in November showed that profits had improved as recent economic stimulus measures began to take effect.
The profit data is also consistent with a slowdown in factory-factory prices in November. The producer price index decreased by 2.5% year-on-year and fell by 2.9% in October.
However, there is some positive news this week. The World Bank on Thursday slightly raised China’s economic growth forecast for 2024 to 4.9% from 4.8% in June.
Nonetheless, industrial profits fell 4.7% in the first 11 months of 2024, deepening the 4.3% decline in the January-October period, reflecting still tepid private demand in the Chinese economy.
one after another Economic indicators released this month have produced mixed results, with industrial output accelerating in November and new home prices falling at the slowest pace in 17 months.
The industrial sector is experiencing an uneven recovery amid insufficient demand, Zhou said, pointing to difficulties faced by real estate and some related industries as evidence of this sluggishness.
China’s leaders vowed at a major policy meeting this month to raise the deficit, issue more debt and ease monetary policy to maintain steady economic growth. The government has also recently pledged to step up direct financial support for consumers and strengthen social protection.
Beijing has Agree to issue record $411 billion in special Treasury bonds next yearReuters reports.
According to breakdown data from the National Bureau of Statistics, in the first 11 months of this year, profits of state-owned enterprises fell by 8.4%, foreign-invested enterprises fell by 0.8%, and private enterprises fell by 1%.
The industrial profit data covers companies whose main business generates annual revenue of at least 20 million yuan ($2.7 million).
- Reuters Additional editing by Jim Pollard
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