China’s industrial gains fall as raw material prices fell
China’s industrial gains in companies rose at a considerably slower pace in the previous month as raw material prices fell.
The statistics bureau said that profits at China’s industrial companies rose at a slower pace in the previous month. This process seemed pressured by falling raw materials prices, a weak property market, and more vulnerable customer demand.
Profits grew 9.0% on-year in the previous month to 805.97 billion yuan, equal to $126.55 billion, well below the 24.7% growth reported in October.
Overview of industrial gains
The statistics bureau said that industrial companies‘ profits increased 38.1% year-on-year to 7.99 trillion yuan for January-November. This process seemed slower than the 42.3% rise in the first nine months of this year. Senior statistician at NBS, Zhu Hong, said that while state measures to decrease flying wholesale prices, mining restrictions weakened overall profit growth. Zhu said that companies still face significant price pressures in a statement accompanying the data release. He added that there is a need for further consolidation of the progress in profits for the downstream sector.
In November, China’s inflation chilled slightly, driven by a government crackdown on soaring commodity prices. The world’s second-largest economy faces multiple challenges as a property downturn worsens and supply blockages continue. It happens while strict Covid-19 curbs beat consumer spending. China’s economy lost steam after a substantial recovery from the coronavirus pandemic last year. The country’s property despair also hurt the steel sector while glass, cement, and household appliances remain weak to dropping demand.
In this month’s critical agenda-setting meeting, China’s top leaders committed to stabilizing the economy and keeping growth within an acceptable range in the following year. The People’s Bank of China lowered the benchmark lending rate to stimulate growth this month. It also cut the amount of cash that banks must keep in reserve.
