China's Sept industrial profits extend gains amid more signs of stabilisation

beijingwalker · Oct 27, 2023

China's Sept industrial profits extend gains amid more signs of stabilisation

FILE PHOTO: A view of the GWM factory during the announcement of the beginning of the activities to produce electric and hybrid cars, in Iracemapolis, Brazil April 27, 2023. REUTERS/Carla Carniel/File photo

27 Oct 2023 10:07AM

BEIJING : Profits at China's industrial firms extended gains for a second month in September, adding to signs of a stabilising economy as the authorities launched a burst of supportive policy measures.

The 11.9 per cent year-on-year rise came on the back of a surprise 17.2 per cent gain in August, and follows stronger-than-expected industrial and consumption activity over September.

For the first nine months, profits slid 9 per cent from a year earlier, narrowing from a 11.7 per cent decline in the first eight months, data from the National Bureau of Statistics (NBS) showed on Friday.

Industrial profits recovered quarter by quarter and swung to a 7.7 per cent growth in the July-September period from declines over the previous two quarters, NBS statistician Yu Weining said in an accompanying statement.

A run of recent data has pointed to a steadying in the world's second-largest economy, which expanded at a faster-than-expected clip in the third quarter after a rapid loss of momentum following a brief post-COVID bounce.

Analysts attribute the stabilisation to a series of policy measures rolled out in the past few months, but the persistent weakness in the crisis-hit property sector remains a major drag on the economy and corporate earnings.

Last week, Chinese battery giant CATL reported a sharp slowdown in profit growth in the third quarter, its weakest quarter since the start of last year amid slowing demand and stiff competition.

In his first remarks on policy following third-quarter gross domestic product data, China's central bank governor Pan Gongsheng vowed to bolster the economic recovery, with a focus on expanding domestic demand while curbing financial risks.

According to a breakdown of the NBS data, state-owned firms saw earnings fall 11.5 per cent in the first nine months, foreign firms booked a 10.5 per cent decline and private-sector companies recorded a 3.2 per cent slide.

Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.73 million) from their main operations.