China Endures Fourth Straight Month of Industrial Declines

China’s industrial profits fell 7.3% year-on-year in November, marking a fourth consecutive monthly decline. While the drop highlights ongoing challenges, it was less severe than October’s 10% decline and September’s steep 27.1% slump, the sharpest since March 2020. The data reflects the strain on China’s factories, utilities, and mining operations as Beijing’s economic stimulus measures work to counter disinflationary pressures.

From January to November, industrial profits slipped 4.7% compared to last year, deepening slightly from the 4.3% year-on-year decline recorded in October. The mining sector faced a sharper contraction, with profits down 13.2%, while manufacturing declined 4.6%. However, utilities showed resilience, recording a 10.9% increase in profits for the first 11 months of the year.

Despite a slew of stimulus measures since September, including commitments to lower interest rates, China continues to wrestle with weak consumer demand and a sluggish property market. Retail sales and trade data for November fell below expectations, and consumer inflation hit a five-month low, underscoring the hurdles facing the world’s second-largest economy.

What Does This Mean for Me?

The World Bank raised its GDP growth forecast for China to 4.9% in 2024 and 4.5% in 2025, reflecting recent policy adjustments. China’s industrial landscape may be stabilizing, but the path to recovery hinges on effective policy implementation and reinvigorated domestic demand. As the nation recalibrates its economic strategy, the coming months will be critical in shaping its trajectory.