China’s October industrial profits extend decline on weak demand
CHINA’S industrial profits fell again in October but less sharply than in September, official data showed on Wednesday, as demand remained soft in the crisis-hit US$19 trillion economy.
Businesses are struggling to stay profitable in the face of a years-long property crisis, sustained unemployment and income pressures, and rising trade tensions. Policymakers have so far not been able to quickly reflate the economy.
Profits in October fell 10 per cent from a year earlier, following a 27.1 per cent slump in September, while earnings slid 4.3 per cent in the first 10 months versus a 3.5 per cent decline in January-September, National Bureau of Statistics (NBS) data showed.
Separate economic indicators earlier this month pointed to broadly soft demand, with consumer prices at their weakest in four months while industrial output continued to trend downward and new home prices fell at their fastest pace in nine years.
Excluding financial sector firms, companies listed on the Shanghai and Shenzhen bourses reported operating income down 1.6 per cent over the third quarter from a year earlier, while their profits were down 7 per cent, state media reported.
China’s US$1.4 trillion local debt package unveiled earlier in November fell short of expectations for strong stimulus to boost consumption, meaning investors are still waiting for a more direct fiscal bazooka.
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State-owned firms saw profits decline 8.2 per cent in the first 10 months, foreign firms posted a 0.9 per cent rise and private-sector companies netted a 1.3 per cent fall, according to a breakdown of the NBS data.
Industrial profit numbers cover firms with annual revenues of at least 20 million yuan (S$3.8 million) from their main operations. REUTERS
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