Chinese economy stabilises as industrial company profits grow

There are more and more indications that the Chinese economy is stabilizing. The statistical data on the profits of industrial enterprises in China in January-February 2024 confirms that Beijing is moving in the right direction with its economic policy. Chinese industry has been experiencing a positive trend, with profits of industrial enterprises increasing since August 2023. The first two months of this year saw a significant increase in profits, with a year-on-year growth of 10.2%. This growth is attributed to higher demand abroad and increased output.
The significant increase in profits can be attributed to the low comparison base in January-February 2023. Nonetheless, the growth in profits of industrial enterprises suggests a gradual stabilization of the economy. It is worth noting that profits declined in the first 7 months of last year, but grew in the last 5 months, with a double-digit rate starting from September. However, this was insufficient to yield a positive result for the entire year 2023. Chinese industry profits fell by 2.3% last year due
to deflationary pressure caused by the ongoing crisis in the construction industry and low consumer confidence in the future. Selling prices of industrial enterprises have also reduced, further decreasing profits.

“As market demand grows and production volumes increase, the income of industrial enterprises has also risen significantly,” quoted Yu Weining, an analyst at the National Bureau of Statistics of the People’s Republic of China (NBS). “This creates favorable conditions for the growth of their profits.”
Yu emphasized that 29 out of China’s 41 major industrial sectors recorded profit growth in the first two months of the year. The mechanical engineering and utilities sectors experienced the largest growth, while miners saw a decrease in income and profits in January and February. Additionally, profits at consumer goods makers rose by 12.9% at the beginning of the year, following a decline of 1.1% last year.
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Chinese economy stabilises as industrial company profits grow

There are more and more indications that the Chinese economy is stabilizing. The statistical data on the profits of industrial enterprises in China in…