Industrial profits on the mainland dropped by 10 percent in October when compared with a year prior, Reuters reports. That’s a far cry from the 27.1 percent plummet seen in September.
However, the decline was steeper across the first 10 months of the year than across the January to September period (4.3 percent versus 3.5 percent), according to the latest National Bureau of Statistics (NBS) data.
Profits in most industries – which include mining, processing and manufacturing – improved compared with the previous month, with NBS statistician Yu Weining noting that emerging areas like equipment and high-tech manufacturing were supporting growth.
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Some private sector economists were less sanguine, partly attributing October’s boost to the effect of a low base in 2023. “For the October monthly data alone, the year-on-year level has a lot of noise due to base effects, and the difference can largely be attributed to this,” said Lynn Song, chief economist for Greater China at ING.
“Overall, profits are still under some pressure this year as the 4.3 percent year-on-year decline year-to-date shows, though there is hope that as more policy easing starts to come through, the operating environment will become more favourable next year.”
According to Reuters, the central government’s latest debt package fell short of expectations and has yet to provide a strong stimulus for more consumption in the country. Further headwinds in the form of US President-elect Donald Trump’s expected tariff hikes are threatening the mainland’s industrial sector, and could spell a reduction in export earnings. The blow would be on top of weak domestic demand caused by China’s years-long property crisis, unemployment and rising trade tensions with other regions.
