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Coal piles at Rizhao port in China’s Shandong province on November 2, 2021.
VCG | China Visual Group | Getty Images
China’s industrial profits declines extended to a fourth consecutive month, falling 7.3% in November from a year earlier, indicating that Beijing’s stimulus measures have not yet significantly reduced the slide in corporate earnings.
The profits slumped 10% year over year in October after a 27.1% fall in September – its strongest drop since March 2020 according to Wind information.
Industrial profits are a key indicator of the financial well-being of factories, utilities and mines in China. The earnings show how companies’ balance sheets are holding up after Beijing’s steps aimed at stimulating the economy.
Despite a host of stimulus measures introduced from the end of SeptemberRecent economic data from China indicates that the world’s second largest economy continues to face disinflation, driven by weak consumer demand and a prolonged slump in the property market.
Consumer inflation in China fell to a five-month low in November, while the the country’s exports and imports wait miss of China the most recent retail sales data also disappointedmissing forecasts.
However, some parts of China’s economy have shown signs of recovery, with manufacturing activity expanding to two months in a row and hit a five-month high in November.
At the beginning of the month, the main officials of China committed to a key meeting to set the economic agenda to mount monetary easing efforts, including lowering interest rates to support the ailing economy.
U The World Bank on Thursday raised its forecast for China’s economic growth 2024 and 2025, reflecting recent political adjustments. It now expects China’s GDP to grow by 4.9% in 2024 compared to its previous forecast of 4.8%, while in 2025, China’s GDP is expected to expand by 4.5%, higher than the organization’s previous forecast of 4.1%.
However, the World Bank has warned that China’s property sector, alongside subdued household and business confidence, will remain a headwind to its growth.
