The slump in Chinese industrial firms’ profits deepened in the first two months of 2023, weighed by lacklustre demand and stubbornly high costs as the world’s second-largest economy struggled to fully shake the long-term effects of COVID, reports Reuters. The sharp 22.9% contraction followed a 4.0% fall in industrial profits for the whole of 2022, data from the National Bureau of Statistics (NBS) showed on Monday, pointing to a downbeat start to the year for factories at large.
NBS statistician Sun Xiao attributed the decline to still soft demand despite an uptick in industrial output, according to a statement on the bureau’s website.
Zhou Maohua, an analyst at China Everbright Bank, said a decline in auto sector profits was a notable drag on manufacturing profits, thanks in large part to a moderation in overall demand, production costs, fading auto subsidies and price wars.