China’s industrial firms see profits grow at slowest pace since April 2020
- Profits rose by 4.2 per cent year-on-year in December, the slowest rate since April 2020, to 734.2 billion yuan (US$116 billion), compared with a 9 per cent gain in November
- For 2021, industrial firms’ profits rose by a whopping 34.3 per cent year-on-year to 8.7 trillion yuan (US$1.38 trillion)
China’s industrial firms saw December profits grow at their slowest pace in more than a year and a half, pointing to cooling demand amid mounting economic challenges for the world’s second-largest economy.
The downbeat data adds to expectations of strong supportive measures from the People’s Bank of China (PBOC) in the coming months to stabilise a faltering economy.
Coronavirus outbreaks have hit consumer spending, a property market downturn is deepening and exports look set to slow.
Constraining factors are building for China’s central bank. With the US Federal Reserve set to raise interest rates in March, time is running out for the PBOC to further ease policy
Figures for the whole of last year, however, showed a stellar rebound, with industrial profits surging by 34.3 per cent to 8.7 trillion yuan ($1.38 trillion) after just 4.1 per cent growth in 2020 when Covid-19 shutdowns pummelled the economy. It was the biggest jump since 2011 when the NBS began to disclose data more regularly.