China’s September industrial profit after steepest year-over-year decline By Reuters
Written by Qiaoyi Li and Kevin Yao
Beijing – China’s industrial profits fell in September, recording the biggest monthly decline of the year, according to official data on Sunday, as policymakers stepped up efforts to revive economic growth.
Profits in September fell 27.1% from a year earlier, following a 17.8% fall in August, while wages fell 3.5% in the first nine months compared to a 0.5% increase in the January-August period, according to the National Bureau of Statistics (NBS ). ).
The decline in industrial profits in September was caused by factors such as insufficient supply and a sharp drop in producer prices, as well as the highest base of comparison since August, said NBS statistician Wei Ning.
But the newly introduced policy measures will “promote a favorable environment for the production and operation of industrial enterprises, support recovery and improve their profitability”, Wei said in a statement.
China’s economy grew at its slowest pace since early 2023 in the third quarter, with the crisis-hit construction sector showing few signs of stabilization as Beijing races to revive growth.
Recent data also pointed to increased inflationary pressure, soft export growth and low credit demand, raising red flags for economic recovery and strengthening the case for fiscal stimulus.
Highlighting the business impact of price cuts and weak demand, profits in China’s auto industry fell 21.4% year-on-year to 30.5 billion yuan in August, data from the China Passenger Car Association showed.
Authorities have sharply increased policy stimulus, including interest rate cuts, since late September to ensure growth will reach Beijing’s target of around 5% this year.
China’s finance minister has vowed to revive the faltering economy, without providing a pocket dollar, following the central bank’s announcement late last month of the most aggressive monetary stimulus measures since the pandemic began.
The size of the expected monetary package has been the subject of intense speculation in financial markets.
Earlier this month, local media Caixin Global reported, citing sources familiar with the matter, that China may raise 6 billion yuan ($842.7 billion) in special treasury bonds over three years to boost the faltering economy.
China’s top legislative body will meet from November 4-8, state news agency Xinhua said last week, but did not provide details on the agenda for debt and other financial measures.
State-owned firms recorded a 6.5% drop in profits in January-September, wages of foreign firms rose 1.5%, while private companies posted a 0.6% drop, according to NBS data breakdown.
The industry profit numbers cover firms with an annual revenue of at least 20 million yuan ($2.8 million) from their core activities.
($1 = 7.1199)
