China’s industrial profit growth is slowing as commodity prices fall, according to Reuters
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BEIJING (Reuters) – Chinese industrial companies’ profits grew at a much slower pace in November, the statistics office said on Monday, driven by falling commodity prices, a tumultuous real estate market and weaker consumer demand.
Earnings rose 9.0% in November to 805.96 billion yuan ($ 126.54 billion) after a 24.6% gain in October.
From January to November, industrial enterprise profits rose 38.0% year-on-year to 7.98 trillion yuan, slower than the 42.2% increase in the first 10 months of 2021, the statistics office said.
Zhu Hong, the NBS’s chief statistician, said efforts to cool wholesale wholesale prices in November were a way to ease the cost pressure on downstream industries, limiting the mining and commodity sectors’ contribution to overall profit growth.
“But companies are still facing heavy cost pressures, and further improvement in the declining sector’s profits needs to be further strengthened,” Zhuk said in a statement accompanying the data release.
China’s factory-gate inflation cooled slightly in November, fueled by government crackdowns on volatile commodity prices and easing power cuts in a bid to curb Beijing’s severe economic consequences of rising costs.
The world’s second-largest economy, which lost steam after a strong recovery from the pandemic last year, faces many challenges as the decline in property deepens, as supply barriers persist and as sharp cuts in COVID-19 affect consumer spending.
The country’s ownership situation has also hurt the steel sector, while production of cement, glass and household appliances remains weak in the face of declining demand.
At a key meeting to set the agenda this month, China’s top leaders pledged to stabilize the economy and keep growth in a sensible range in 2022.
The People’s Bank of China (PBOC) this month reduced the amount of money banks need to hold in reserve and lowered the one-year benchmark lending rate to boost growth.
Industry earnings figures include large companies with annual revenues of more than 20 million Yuan.
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