China’s industrial profits extend gains as outlook improves

BEIJING: Profits at China’s industrial firms extended gains for a third month in October, adding to signs of a stabilising economy following a run of mostly upbeat data suggesting Beijing’s support measures have helped bolster a tentative comeback.

The 2.7% year-on-year rise came on the back of an 11.9% gain in September and a surprise 17.2% increase in August, and follows stronger-than-expected industrial and consumption activity over October.

For the first 10 months of 2023, profits slid 7.8% from a year earlier, narrowing from a 9% decline in the first nine months, data from the National Bureau of Statistics (NBS) showed on Monday.

The world’s second-largest economy has struggled to mount a strong post-COVID recovery as distress in the housing market, local government debt risks, slow global growth and geopolitical tensions dented momentum.

A flurry of policy support measures has had only modest effect, raising pressure on authorities to roll out more stimulus. “Three consecutive months of positive profit growth suggest that the worst times, when profitability was squeezed by high input costs, overcapacity and soft demand, are over,” said Xu Tianchen, senior economist at the Economist Intelligence Unit