Chinese industrial companies’ profit surged 29.5% on year in Nov, private firms’ profit returned to growth for first time this year
STOCKS
Chinese industrial companies’ profit surged 29.5% on year in Nov, private firms’ profit returned to growth for first time this year
STOCKS

Chinese industrial companies’ profit surged 29.5% on year in Nov, private firms’ profit returned to growth for first time this year

 

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Chinese industrial companies’ profits posted double-digit growth in November as industrial production picked up amid gradually improving demand.

The profit surged by 29.5% in November from a year earlier, picking up sharply from a 2.7% growth in October and expanding for the fourth consecutive month, according to data released by the National Bureau of Statistics on Wednesday.

In the first 11 months of this year, industrial profit declined by 4.4% from the same period last year, improving from a 7.8% drop in the period of January – October and narrowing within 5% for the first time this year, the data showed.

The companies’ revenue grew by 1% year over year in the 11-month period, accelerating by 0.7 percentage point from the first ten months, and in November alone, revenue grew by 6.1% from a year earlier, picking up by 3.6 percentage points from October and accelerating for the fifth month in a row, according to the NBS.

In breakdown, state-owned enterprises’ profit declined by 6.2% in the January – November period from a year earlier; joint-equity companies’ profit fell by 3.1%; foreign-invested companies’ profit dropped by 8.7%; and privately-owned companies’ profit rose by 1.6%, returning to growth for the first time this year, showed the data. 

Behind the November profit rise was an accelerated uptick in industrial profits and returns on investments over the month, NBS statistician Yu Weining said in an accompanying statement.

Of the three major industrial sectors, the mining sector’s profit fell by 18.3% year over year in the first 11 months, narrowing by 1.4 percentage points from the January – October period; the manufacturing sector’s profit fell by 4.7%, narrowing by 3.8 percentage points; and the utility sector’s profit surged by 47.3%, accelerating by 7.3 percentage points, showed the data.

The raw material manufacturing industry saw the decline in its January – November profit narrow by 8.5 percentage points from the first ten months, helping narrow the drop of China’s industrial profit by 1.8 percentage points and making it the biggest contributor to the improvement of the overall industrial profit, said Yu.

In particular, steel industry’s profit surged 2.76 times year over year in January – November, driven by improving demand from downstream industries and low base; non-ferrous metal industry’s profit returned to growth, surging 21.8%; and the drop of the chemical industry’s profit narrowed by 4.3 percentage points, surging by 26.7% in November alone, he said.

With a slew of pro-growth measures in place to buttress a patchy post-COVID recovery, China is widely expected to achieve the government’s growth target of around 5% for this year.

Officials are confident about more favourable economic conditions in 2024. But the economic recovery remains shaky amid persistent property sector weakness, rising deflationary pressures and soft global demand, renewing calls for stimulus.