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China’s December Industrial Profits Show Growth at Slower Pace

Profits rose 4.2% year-on-year, the slowest rate since April 2020, to 734 billion yuan ($115.9 billion), compared with a 9% gain in November

Workers produce washing machine parts
Workers produce washing machine parts at a factory in Nanjing. The official PMI, which largely focuses on big and state-owned firms, and its sibling survey for the services sector, will be released on Saturday. File photo: AFP.


Profits at China’s industrial companies grew at a slower pace in December, official data released on Thursday show, as factory-gate inflation continued to ease, pointing to cooling demand amid mounting economic challenges.

Profits rose 4.2% year-on-year, the slowest rate since April 2020, to 734.2 billion yuan ($115.9 billion), compared with a 9% gain in November.

For 2021, industrial firms’ profits rose 34% year-on-year to 8.7 trillion yuan, the National Bureau of Statistics (NBS) said.

“In 2021, the profits of industrial enterprises achieved relatively fast growth, with corporate efficiency steadily improving,” Zhu Hong, a senior NBS statistician, said in a statement.

“We must acknowledge that growth rates dropped significantly in November and December and that downstream firms, especially small firms, still face relatively big operational pressures and the number of loss-making firms is still high,” Zhu said.

China’s factory-gate inflation cooled for the second straight month in December, driven by a government crackdown on runaway commodity prices as Beijing scrambled to lessen the crippling economic effects of surging costs.

To stabilise a faltering economy, the People’s Bank of China has rolled out new monetary policies over the past few weeks.

It unexpectedly cut the borrowing costs of its medium-term loans for the first time since April 2020, and lowered the benchmark lending rates.

The world’s second-largest economy has been losing steam after staging a solid recovery from the pandemic and now faces multiple challenges heading into 2022.

Slowing exports, a major property sector downturn and strict Covid-19 curbs have hit consumer spending.

China’s economy grew 4% in the fourth quarter from a year earlier, marking its weakest expansion in 18 months.


  • Reuters, with additional editing by George Russell





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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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