Chinese Industrial Profits Grow Higher. Chinese industrial companies posted higher net profits in the early months of 2024. This shows that the economic recovery is gaining momentum, even though the property sector continues to face sluggishness.
Based on data from the National Bureau of Statistics (NBS), Chinese industrial companies’ profits have jumped 10.2% in the first two months, compared to the same period last year, with profits falling by 2.3% throughout 2023.
This increase occurred in line with the improvement in various indicators in early March 2024, which shows stabilization in China. But overall, gains were still limited by weakness in China’s property market, which differentiated the country’s recovery after the pandemic.
Chief Greater China economist at ING also stated that if manufacturing recovery continues, this will contribute to achieving the 2024 growth target. However, more supportive policies are still needed to maintain momentum and recovery.
Based on data, Chinese state-owned companies or state-owned companies recorded an increase in revenue of 0.5% in January-February 2024. Revenues of foreign companies rose 31.2% and private companies increased 12.7%.
Chinese Industrial Profits Grow Higher. Analyst at China Everbright Bank, Zhou Maohua, believes that industrial sector revenues will continue to increase. However, there are still several obstacles that need to be faced.
These obstacles consist of uncertain global demand prospects, fluctuations in energy and other commodity prices, as well as supply chain disruptions due to geopolitical conflicts. However, a broad recovery in China’s domestic demand is still visible.
Previously, in the face of prolonged economic weakness, the deputy head of the central bank last week reassured the market about the policy options available, including cutting the bank reserve requirement ratio (RRR). Then, in January 2024, the central bank announced the biggest RRR drop in two years.
The Bureau of Statistics also reports combined data for the first two months to sort out distortions due to the Chinese New Year holiday. The industry profit data covers companies with annual revenues of at least 20 million yuan from their main operations.
