By Qiaoyi Li, Joe Cash and Liangping Gao
BEIJING (Reuters) – China’s October industrial profits narrowed their earlier decline, helped by a year-ago low, government data showed on Wednesday, but economic turmoil remained strong with the economy struggling with weak demand and stress.
China’s booming industries, which include mining, processing and manufacturing companies, are struggling to stay profitable in the face of domestic pressures hit by years of economic crisis, unemployment and trade tensions.
Although policymakers have promised to meet the government’s target of 5% GDP growth this year, the $19 trillion economy is still lagging behind.
Industrial profits in October fell by 10% from a year earlier, more than the 27.1% decline in September, although earnings fell by 4.3% in the first 10 months against a decrease of 3.5% in January-September, National Bureau of Statistics (NBS) showed. .
Profits in most industries improved compared to last month, with new drivers such as equipment and high-end equipment contributing significantly, NBS analyst Yu Weining said in a follow-up statement.
But private sector economists said the change in October was due to last year’s decline. Industrial profits in October 2023 grew 2.7%, down from double-digit gains in August and September last year.
“For the October data alone, the year-on-year level has a lot of noise due to the preliminary results, and the difference can be caused by this,” said Lynn Song, Greater China economist at ING.
“Overall, profits are still in some trouble this year as the 4.3% year-on-year decrease shows, although there is hope that with the reduction of the policies, the working environment will be very good. year.”
DEFLATIONARY PRESSURES
Separate economic indicators earlier this month showed softening demand, with consumer prices falling to their lowest level in four months as industrial output continued to decline and new home prices fell to their fastest pace in nine years.
Data at the beginning of this month show that producer prices fell 2.9% per year in October, deeper than the 2.8% drop the previous month and worse than the 2.5% expected. It was the lowest in 11 months.
Factory gate damage is particularly prevalent in oil and gas extraction, oil and coal processing, chemical manufacturing and automotive parts.
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