Profits of industrial companies in China plummet

In China, industrial companies' profits fell by 23 percent in the first two months of the year compared to the same period of the previous year. In the same period, foreign industrial companies' profits fell by up to 36 percent. In China, the industrial sector has not yet fully recovered due to the strict COVID measures and prices are on a downward trend, leading to a sharp decline in industrial companies' profits. According to data from China's National Bureau of Statistics, industrial companies' profits fell by 22.9 percent in the first two months of the year compared to the same period of the previous year. Foreign companies' profits fell by 35.7 percent. In the same period, private industrial companies' profits fell by 19.9 percent, while public companies' decline was 17.5 percent. In the entire year of 2022, which was overshadowed by strict COVID measures in the country, industrial companies' profits fell by 4 percent. Sun Xiao from the National Bureau of Statistics stated in his assessment of the data that although industrial production has begun to recover, market demand has not fully recovered. Sun noted that the decline in companies' revenues was greater than the decline in costs. SocGen China Economist Michelle Lam also said that industrial companies have not yet reflected their costs in prices because market demand has not yet fully recovered.