China’s October industrial profits post biggest fall since 2011 amid trade war and sliding producer prices

Profits at China’s industrial enterprises shrank 9.9 per cent in October from a year earlier, the biggest fall since 2011

The contraction shows continued problems for the world’s second largest economy as it battles slow growth amid a trade war with the United States

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October’s fall in industrial profits to was worse than a 5.3 per cent contraction in September. Photo: EPA-EFE

Published: 10:19am, 27 Nov 2019Updated: 10:54pm, 27 Nov 2019

Profits at China’s industrial firms continued to slide in October, posting their steepest fall since 2011 as producer prices remained weak and trade tensions with the US weighed on the world’s second largest economy.

Industrial profits plummeted 9.9 per cent to 427.56 billion yuan (US$60.7 billion) in October from a year earlier, down from a 5.3 per cent contraction in September, according to the National Bureau of Statistics (NBS). The result was below analysts’ expectations.

The contraction was the third straight month of decline and highlights continued problems for the Chinese economy, which is growing at its slowest pace in nearly three decades. China’s stocks dropped for the first time this week on news of industrial data.

“We expect industrial profit growth to remain sluggish, given the deteriorating growth outlook and elevated uncertainty amid the US-China trade conflict,” analysts from Nomura said.

“In our view, Beijing will likely roll out more easing measures in coming months despite a limited policy room.”

In the first 10 months of the year, combined profits at Chinese industrial enterprises decreased 2.9 per cent year-on-year, the NBS said.

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