2024-10-29
Test post
China industrial profit continued to decline in September due to expanding deflationary pressure, according to data released by China’s National Bureau of Statistics on October 27.
Profits for large-scale industrial enterprises fell by 27.1% year-on-year in September, down 9.3 percentage points from the previous month's decline of 17.8%. Cumulatively, profits for the first nine months of the year dropped by 3.5%, compared to a 3.0% decrease in the first eight months.
High-tech manufacturing remained the key driver of industrial profits, with cumulative growth of 6.3%, contributing 1.1 percentage points to overall growth. However, this was a decline from the 10.6% cumulative growth reported for January to August.
Yu Weining, a statistician from the National Bureau of Statistics, attributed the decline to weak domestic demand and falling industrial product prices. Recent figures show that China’s core CPI rose by just 0.1% year-on-year in September, down 0.2 percentage points from the previous month, while the PPI fell by 2.8%, marking 24 consecutive months of decline, reflecting persistent weakness in domestic demand.
With trade barriers expected to increase in the future, China’s manufacturing sector may struggle to absorb its excess capacity through exports and domestic demand, further compressing corporate profits and intensifying deflationary pressures. This could make it even more difficult for China to achieve its 5% annual economic growth target.
From November 4 to November 8, the Chinese government will convene the Standing Committee of the National People’s Congress in Beijing, where the market will be watching for any new stimulus measures.
Read more at Datatrack