New Delhi: China’s industrial enterprises continued to be hammered by shrinking profits even as Beijing reiterated that the economy is on track to reach its growth target for the year, media reports said.
Profits at firms with revenue 20 million yuan ($2.8 million) slid by 7.8 per cent in the first ten months of the year, a narrowed 1.2-percentage point decline compared with the January to September number, according to data released by the National Bureau of Statistics Monday.
State-owned enterprises’ profits fell 9.9 per cent, while companies with foreign, Hong Kong and Macau interests declined by a wider 10.2 per cent at a time when China could use more foreign investment.
The statistics bureau said for October alone, profits at all firms only grew 2.7 per cent. It is a third straight month of profit growth at a significantly slower pace, compared with 11.9 per cent in September and 17.2 per cent in August, Radio Free Asia (RFA) reported.
Analysts said more government policies are needed to fend off economic headwinds that include a persisting property crisis, which is tied to the local government debt issue, flagging global demand for manufactured goods, and foreign investors wary of an increasingly inward-looking investment environment.
Dwindling profits for foreign-invested enterprises reflected in Monday’s data do not bode well for how foreign businesses perceive the world’s second-largest economy, RFA reported.
Alfredo Montufar-Helu, head of think tank The Conference Board’s China Center for Economics and Business, said confidence levels among multinational company chief executives vary between industries and companies.
“But it is also undeniable that the state of China’s economy and the uncertainty brought by geopolitical tensions is hurting sentiment,” Montufar-Helu said, RFA reported.
According to the Conference Board’s biannual survey that measures CEO confidence for China released last week, just 31 per cent of business leaders said the economic conditions in the second-half of 2023 were better compared to six months ago, down substantially from 88 per cent in the first-half.