BEIJING – Statistics Bureau data on Sunday pointed out that profits reaped by Chinese industrial firms in November dropped 1.4 percent from the last year, recognizing a sixth straight month of the slump.
The National Bureau of Statistics (NBS) on its website mentioned that Industrial profits covering large firms with annual earnings of more than 20 million yuan (2 million pounds) from their main operations fell by 1.9 percent in the first 11 months of this year compared with the same period last year. In October, profits declined by 4.6 percent from last year so the November earnings of industrial companies have undergone some improvement from the previous October month. According to Zhou Hao, Chinese economist at Commerzbank, Singapore, ““The November industrial profit data matched earlier output data and they showed some signs of stabilizing, which are in line with recent data from other Asian countries” also adding that this numerical data is more than the market expectations.
He Ping, an official from the Industry Department at NBS stated “Declines in industrial profits narrowed in November, but uncertainties still exist,” Ping further added that finished goods inventory flourished at a faster rate in the last month.
Profits from the state-owned enterprises (SOEs) amongst the main industrial corporations witnessed a 23 percent decline in the first 11 months in 2015 when compared with the same period in 2014. Mining was the laggard sector, with profits slumping by 56.5 percent for the same time period.
Aluminium producer China Hongqiao Group announced earlier this month that to curb supplies it is immediately going to cut the annual capacity by 250,000 tonnes.
In an effort to raise the prices from their worst decline in over a decade, Eight Chinese nickel producing firms including state-owned Jinchuan Group Co Ltd [JCGRP.UL] announced that they would decrease production by 15,000 tonnes for this month and decrease output in 2016 by at least 20 percent from 2015.
Owing to overcapacity and weak domestic demand, China’s producer prices have been in adverse and gloomy terrain for about four years.
China’s top leader last week outlined main economic targets for 2016 in the annual Central Economic Work Conference and announced that the government will impart a forward thrust to “supply-side reform” to aid create new growth engines in the Chinese economy and simultaneously tackling factory overcapacity and property inventories.