appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Ralph Jennings

China’s industrial profits dropped in October after a strong September, according to official year-on-year data released on Thursday, and analysts are pointing to domestic competition and trade tensions weighing on corporate balance sheets.
Profits fell 5.5 per cent from a year ago, reversing a 21.6 per cent surge in September and a 20.4 per cent jump in August, according to figures from the National Bureau of Statistics.
For the January-October period, profits earned by Chinese companies of a certain scale rose by 1.9 per cent, slower than the 3.2 per cent growth in the first nine months, the bureau said.
Profits among manufacturers grew by 7.7 per cent from January through October, while earnings for electricity, heat, gas and water providers expanded by 9.5 per cent. Meanwhile, mining profits saw a year-on-year decline of 27.8 per cent.
The profit setbacks last month were partly due to a high base effect and rapid growth in financial expenses, the bureau said.
A cyclical pause in Chinese holiday spending spikes combined with an expected slowdown of spending in the US – still a major Chinese export market despite the trade war – could have also chilled profits in October, said Charles Chang, a finance professor at Fudan University in Shanghai.
Chen Zhiwu, chair professor of finance at the University of Hong Kong, said that excess production capacity and cutthroat domestic price competition likely contributed to the fall in profits last month.
Price competition, also referred to domestically as “involution”, has concerned officials for much of the year. President Xi Jinping criticised the trend in July as a lever for “unproductive outcomes”.
On Monday, a price-monitoring department under the National Development and Reform Commission stated at a symposium that “disorderly price competition remains a prominent problem in some industries”, with enterprises not always complying with requirements to regulate it.
The commission said it would work with government departments to address the issue and “contribute to high-quality development”.
This year’s US-China trade war, led by rising tariffs and export controls, took a bite last month, too, Chen said, as did a less “aggressive” use of economic stimulus measures that he said were more visible in the first half of the year.
The statistics bureau called for expanding domestic demand and cultivating “new growth drivers” against the backdrop of a “severe, complex international environment intertwined with domestic cyclical and structural contradictions”.


How Chinese firms can avoid a Europe-style backlash in Southeast Asia

Hong Kong tycoon-backed start-up bets on new battery to challenge energy-storage giants

China and EU deadlocked on medical devices, still talking on PHEV curbs: source

Chinese marques in driving seat as high petrol prices accelerate EU shift to electric cars

China manufacturing

China’s industrial profits slump in October as price war deepens

In October, China’s industrial profits fell 5.5 per cent from a year prior. Photo: AFP

China’s vow to shield manufacturing aims to ward off industrial decline

Workers at the Seres Super Factory in Liangjiang New Area, southwest China’s Chongqing on September 19. Photo: Xinhua

China names ‘hotspot’ sectors in 19-point plan to spur consumption

The consumer goods exhibition area at the China International Import Expo in Shanghai earlier this month. Photo: Xinhua

Visitors check out porcelain products in the consumer goods exhibition area at the China International Import Expo in Shanghai earlier this month. Photo: Xinhua

Chinese tourism to Russia soars as travellers pivot from under-fire Japan

Chinese tourists pose for a photo in Red Square in central Moscow. Photo: AP

Lake Baikal in eastern Russia is a popular destination among Chinese tourists. Photo: Reuters

China sets strongest yuan fix in over a year as Fed-cut bets rise

China’s central bank has set the yuan’s daily reference rate against the US dollar at the strongest level in more than a year. Photo: Reuters

What economic cards will China play with Japan? Analysts say Beijing faces a balancing act

A woman walks past a Japanese restaurant in Beijing on November 19. China has reportedly reimposed an import ban on Japanese seafood just weeks after lifting it. Photo: AFP

Economy

Economic Indicators

China Economy

News

China

Beijing to crack down on ‘disorderly’ market practices amid rising financial costs, while analysts point to excess capacity eating into corporate margins


Beijing to crack down on ‘disorderly’ market practices amid rising financial costs, while analysts point to excess capacity eating into corporate margins.


China’s industrial profits slump in October as price war deepens

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Beijing to crack down on ‘disorderly’ market practices amid rising financial costs, while analysts point to excess capacity eating into corporate margins

Beijing to crack down on ‘disorderly’ market practices amid rising financial costs, while analysts point to excess capacity eating into corporate margins