Growth at Chinese listed companies might decline to four-year low in 2019, Fitch says

Companies listed in mainland China might post their slowest growth in four years in 2019, amid a global economic downturn and the ongoing US-China trade war, according to international credit rating agency Fitch Ratings.

“We expect export-oriented Chinese technology companies to remain under pressure from customers moving their supply chains away from China,” the New York-based ratings agency said in report this week. iPhone maker Apple, for example, was reported in June to be exploring moving 15 per cent to 30 per cent of its production capacity from the mainland.

In the first half of the year, Chinese A-share companies across all sectors except consumer staples posted their lowest year-on-year revenue growth since the same period in 2016, and the slowest expansion in profit since January through June 2015, according to Fitch.

Total revenue growth across the more than 3,500 companies dropped 5.4 percentage points year on year to 8.3 per cent, while profit growth declined 26.4 percentage points to just 0.5 per cent. The existing trend is expected to continue through to the end of the year, Fitch said.

The global economy is slowing as geopolitical tensions, including the US-China trade war and Brexit, heighten.

The Organisation for Economic Cooperation and Development said last month that worldwide growth was likely to slow to 2.9 per cent in 2019 and 3 per cent in 2020, the weakest annual growth rates since the 2008 financial crisis.