Industrial profits in China decline 8.4 percent last month

(MENAFN) Industrial profits in China saw a significant decline of 8.4 percent in November 2024 compared to the same month the previous year, continuing a downward trend observed over the past three months. The total profit of industrial enterprises with annual revenues exceeding 20 million yuan (around USD2.74 million) reached 6.67 trillion yuan (approximately USD913 billion) during the first 11 months of the year. However, this represents a 4.7 percent decrease from the same period in 2023, adding to the 4.3 percent drop recorded in the previous 10 months.

State-owned enterprises experienced a sharper decline in profitability, with profits falling by 8.4 percent, while private sector companies saw a more modest 1 percent decrease. Industrial profits have been on a downward spiral since August, with particularly severe drops in August (17.8 percent), September (27.1 percent), and October (10 percent). This trend highlights the continued challenges facing China's industrial sector.

The decline in industrial profitability points to long-standing issues such as weak domestic demand, deflationary pressures, and a slowdown in the real estate sector, all of which continue to hinder economic growth. Despite measures introduced by the government and related economic institutions to stimulate the economy, including some stimulus efforts since September, these actions have yet to make a significant impact on the real economy.

The Chinese economy grew by 4.8 percent during the first nine months of 2024, falling short of the government’s growth target of "around 5 percent." This underperformance underscores the ongoing difficulties faced by the country’s industrial and broader economic sectors as they struggle with a range of structural issues.

MENAFN29122024000045015839ID1109038767