Earnings data at Chinese industrial companies showed that profits were lower in November than a year previous – the first fall since late 2015 as firms brace for a prolonged economic slowdown.
Industrial profits declined 1.8% year-on-year last month, snapping back from 3.6% growth in October. According to the Financial Times, investment bank Goldman Sachs estimate that the fall was even sharper when seasonally adjusted, from 7.2% in October.
Weakening demand, both within China and globally, is pushing businesses to hold back on investment, say analysts.
The gloomy figures are also likely to have been affected by China’s relatively low inflation as a result of slowing credit growth, softening nominal profit growth for industrial firms.