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In November, China witnessed significant growth in industrial profits, with double-digit gains observed. This positive development can be attributed to an overall improvement in the manufacturing sector. However, it is important to note that business growth expectations remain constrained due to soft demand. Consequently, there is an increasing demand for additional macro policy support to address this issue.

Profit Growth Does Not Reflect the Real State of Affairs in the Economy

The observed growth in profit, amounting to a notable 29.5%, occurred in conjunction with a prior increase of 2.7% in October. This positive trend coincided with a rise in industrial output during the month of November. However, it is worth noting that certain sectors within the world’s second-largest economy failed to meet projected expectations.

According to data released by the National Bureau of Statistics (NBS) on Wednesday, industrial earnings experienced a contraction of 4.4% in the initial 11 months of 2023 compared to the corresponding period in the previous year. This decline represents a further narrowing from the 7.8% decrease observed between January and October.

According to the statement provided by NBS statistician Yu Weining, the increase in profits observed in November can be attributed to a notable surge in industrial profits and returns on investments during the month.

With an array of pro-growth initiatives implemented to support a somewhat uneven post-COVID recuperation, it is widely anticipated that the largest economy in Asia will successfully attain the government’s growth objective of approximately 5% for the current year. The trajectory of industrial profits has continued its upward trend, marking a notable expansion for the fourth consecutive month.

Based on Zhou Maohua, an analyst at China Everbright (OTC:CHFFF) Bank, the observed increase in industrial output and earnings during the month of November can be attributed to the sustained progress witnessed in the manufacturing sector as a whole.

The upward trajectory can be attributed to a combination of macroeconomic policies aimed at providing financial assistance to industrial firms, a relatively low statistical base from the previous year, and seasonal factors, as stated by the expert.

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Power Confidence and the Volatility of the Chinese Economy

The authorities express a high level of confidence regarding the anticipated improvement in economic conditions for the year 2024. However, it is important to note that the current state of the economic recovery continues to exhibit fragility due to the ongoing challenges faced by the property sector, the emergence of deflationary pressures, and the subdued global demand. These factors have prompted a renewed discourse on the necessity of implementing stimulus measures to bolster the economy.

Although there has been a general improvement in the manufacturing sector, it is important to note that not all segments within the industry have fully recovered at this time.

In the words of Zhou, there continues to be a noticeable disparity among various industrial sectors, wherein high-tech and equipment manufacturers are experiencing substantial and swift profit expansion. Conversely, property-related sectors are grappling with the persistent challenge of diminishing profits.

The analyst expressed a desire to witness the implementation of a “optimized” combination of macroeconomic policies aimed at bolstering economic growth.

Do-Fluoride New Materials Co, a prominent chemicals producer in China, has recently projected a decline in its net profit for the year 2023. This projection is primarily attributed to the heightened competition within the industry and a decrease in downstream demand, both of which have had a significant impact on the company’s financial performance.

The anticipated decrease in net profit is estimated to range between 68.17% and 71.25%, reflecting the challenging market conditions faced by Do-Fluoride New Materials Co.

The forecast of Zheng Houcheng, the chief macroeconomist at Yingda Securities, it is highly unlikely that industrial profits will experience any growth throughout the entirety of 2023. This projection is primarily based on the expectation that China’s producers’ prices will continue to face significant downward pressure in the foreseeable future.

According to a detailed breakdown of the data, it has been observed that state-owned firms experienced a decline of 6.2% in their earnings during the initial 11 months. Similarly, foreign firms reported a notable decrease of 8.7% in their earnings, while private-sector companies, on the other hand, showcased a modest gain of 1.6%.

The scope of industrial profit figures encompasses enterprises whose primary operations generate annual revenues of no less than 20 million yuan ($2.80 million).

Peter Bergman (

By Peter Bergman (

Peter Bergman is an experienced financial writer with a passion for helping people achieve financial freedom. With over a decade of experience, he has written extensively on topics ranging from personal finance to investment strategies, and his work has been featured on and other leading financial websites.

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