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Luna Sun

China has reported its steepest fall in industrial profits in more than three years, as expectations mount that Beijing will double down on stimulus to boost growth and confidence in the economy.
According to data released by the National Bureau of Statistics (NBS) on Sunday, profits for major industrial firms – those with annual revenues at least 20 million yuan (US$2.8 million) – fell by 27.1 per cent in September from a year earlier.
It was the biggest percentage point drop since March 2020 when the country was hit hardest by the pandemic.
Over the first nine months of the year, industrial profits dipped by 3.5 per cent year on year to 5.23 trillion yuan, snapping eight months of increases from January, the official data showed.
The decline comes as the world’s second-biggest economy grapples with persistent deflationary pressure and subdued demand.
To help shore up the economy, Beijing launched a policy “bazooka” in late September – an effort that included key lending and mortgage rate cuts.
It also included the issuance of ultra-long-term special bonds to help major state-owned banks and the real estate sector, incentives to boost consumer spending, and efforts to mitigate local debt risks.
Through government spending, we aim to leverage social investment, stimulate consumption, and boost effective demand
Liao Min, finance vice-minister
But the scale of the fiscal measures has yet to be revealed, and the market is anxiously awaiting the results of a National People’s Congress Standing Committee meeting scheduled for November 4-8 in Beijing, a gathering that is expected to give further details on the stimulus package.
On the sidelines of World Bank meetings in Washington on the weekend, finance vice-minister Liao Min said the scale of the roll-out would be substantial, and China remained confident of achieving its annual growth target of around 5 per cent.
According to a statement released on Sunday, Liao said that “beyond monetary policy, China will double down on its countercyclical fiscal measures, implement strong initiatives to address local government debt, stabilise the real estate market, raise incomes for key groups, ensure people’s livelihoods, and promote equipment upgrades and trade-in programmes for consumer goods”.
“Through government spending, we aim to leverage social investment, stimulate consumption, and boost effective demand,” he said.
Despite September’s stimulus package, China’s economy grew by just 4.6 per cent year on year in the third quarter, the lowest rate since mid-2023, as the property market and consumer spending slumps continued to drag on prospects.
The NBS said the decline in industrial profits was a combined result of weak demand and persistently low factory prices further squeezing revenue and profit margins, with costs growing faster than revenues.


Nevertheless, China’s hi-tech manufacturing sector showed signs of resilience amid Beijing’s push for advanced technology and smart manufacturing.
Profits in smart manufacturing industries were up in September, including 27.5 per cent growth in in-vehicle intelligent systems and 25.6 per cent growth in wearable smart devices.
Profits in the drone sector also grew more than 10 per cent, and lithium-ion battery production profits were up 58.8 per cent.
Underscoring the momentum in hi-tech and sustainable industries, growth rates of more than 30 per cent were reported in emerging fields like sensor manufacturing and electronic circuit production, with navigation and ocean mapping instruments jumping by more than half, the bureau said.
Global Wealth Management Forum chairman Lou Jiwei was also positive about the stimulus package, saying that since late September, China’s series of supportive policies had improved both the current climate and long-term growth.
“These measures have effectively shifted market expectations, reinforcing confidence in China’s long-term economic stability and positive outlook,” Lou said at the forum in Beijing on Sunday.


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All eyes are on November’s NPC Standing Committee meeting for more details of support for the economy.
