China’s industrial profits extended their decline for a fourth straight month, falling 7.3% in November

China’s industrial profits extended decline for fourth month in a row, down 7.3% in November from a year earlier, signaling that Beijing’s stimulus measures have yet to significantly stem the decline in corporate earnings.

However, the drop in profit was smaller than the drop in previous months. They fell 10% year-on-year in October after a A drop of 27.1% in September — their biggest drop since March 2020, according to Wind.

“There is no surprise” about the persistently lower profits faced by industrial companies, especially in China’s disinflationary environment, said Suan Teck Kin, head of research at UOB.

However, “the worst is over” for China’s economy given the stimulus package, she added. “I think it basically just bottomed out, and now it’s on its way up,” he told CNBC’s “Street Signs Asia.”

Industrial profits are a key indicator of the financial well-being of factories, utilities and mines in China. Earnings show how business balance sheets are stacking up after steps by Beijing aimed at stimulating the economy.

Foreign-invested industrial companies, including those with investment from Hong Kong, Macao and Taiwan, saw profits fall 0.8% from January to November, compared with last year.

“With the effective implementation of existing policies, the accelerated introduction of incremental policy packages, and the continued effect of the policy mix, industrial output above the indicated size has grown steadily,” said Yu Weining, a statistician at State Bureau of Statistics, according to a Google translation of her Chinese comments.

Despite a series of introduced incentive measures from the end of Septemberrecent economic data from China shows the world’s second-largest economy continues to struggle with disinflation, fueled by weak consumer demand and a prolonged downturn in the housing market.

Consumer inflation in China fell to the lowest level in five months in November, while data on the country’s exports and imports missed expectations. Chinese the latest retail sales data also disappointedforecasts are missing.

However, some parts of the Chinese economy are showing signs of recovery, with manufacturing activity increasing by two months in a row and hitting a five-month high in November.

Earlier this month, China’s top officials pledged to a key economic meeting to set the agenda accelerate monetary easing efforts, including lowering interest rates to support the ailing economy.

The On Thursday, the World Bank raised its forecast for China’s economic growth 2024 and 2025, reflecting recent policy adjustments. It now expects China’s GDP to grow by 4.9% in 2024, compared with a previous projection of 4.8%, while China’s GDP is expected to grow by 4.5% in 2025, which is higher than the organization’s previous forecast. of 4.1%.

However, the World Bank has warned that China’s struggling real estate sector, along with subdued household and business confidence, will continue to be a drag on its growth.