Trade war fears and low demand sees profit growth at China’s industrial giants cut in half
- Industrial profit growth falls for eight consecutive months since April, dragging the full-year growth down to 10.3 per cent, compared to 21 per cent in 2017
- December’s industrial profits also fell 1.9 per cent from a year earlier, the worst monthly performance since 2015
China’s industrial companies saw their profit growth scythed in half last year, as economic activity cooled in the world’s second largest economy.
Industrial profits growth has now fallen for eight consecutive months since April, dragging the full-year growth down to 10.3 per cent, compared to 21 per cent in 2017, according to data released by the National Bureau of Statistics (NBS) on Monday.
December’s industrial profits also fell 1.9 per cent from a year earlier, the worst monthly performance since the end of 2015, and the second consecutive monthly decline.
The decline was partly due to slow growth of the producer price index for industrial products (PPI), also known as the factory gate price, indicating weak demand for industrial goods. In December, PPI grew only 0.9 per cent from a year earlier. Month by month, PPI was down 1 per cent from November.
The data track profits from firms that report more than 20 million yuan (US$2.96 million) in revenue from their main business. At the end of last year, industrial firms reported profits of 680.8 billion yuan (US$100.75 billion) for December and 6.63 trillion yuan (US$982 billion) for the whole year.
