China’s industrial profits declined 7.8% YoY in Jan-Oct 2023

on Nov 27, 2023
  • China's industrial profits fell YTD, but were slightly higher than expectations.
  • Electric power and heat production and supply industries saw the sharpest improvement.
  • Markets await domestic factory data to be released later this week.

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Post the pandemic period, China’s recovery remains uneven and less certain than initially anticipated as deflationary and consumer demand pressures continue to cause concern.

For January to October 2023, profits earned by China’s industrial firms fell by 7.8% YoY, improving from the 9.0% decline in the January through September data.

In absolute terms, industrial profits were recorded at CNY 6.11542 billion (£690 million; £1 = CNY 8.92) in the first ten months of the year, higher than the CNY 5.411 billion registered in the previous report.

As per, China’s year-to-date industrial profits although declining, outperformed forecasts of (-)8.0% YoY.

For the month of October, profits of industrial enterprises were up 2.7% YoY.

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State-controlled enterprises witnessed a 9.9% YoY decline in their industrial profits, while joint-stock enterprises; foreign, Hong Kong, Macao, and Taiwan-invested enterprises; and private enterprises each declined by 7.0%, 10.2%, and 1.9%, respectively.

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In reference to the 41 industries surveyed, healthy profitability was achieved in electric power and heat production and supply (50.1% YoY), ferrous metal smelting and rolling processing industry (37.0% YoY), electrical machinery and equipment manufacturing (20.8% YoY).

Other industries that saw profit growth included general equipment manufacturing, special equipment manufacturing, automobile manufacturing, non-ferrous metal smelting and rolling processing, textile industry, oil and natural gas extraction, and agricultural and sideline food processing.

In terms of declining profits, this included the manufacturing of computers, communications and other electronic equipment(-18.2% YoY), non-metallic mineral products (-26.5% YoY), the coal mining and washing (-26.6% YoY), coal and other fuel processing (-27.0%), chemical raw materials (- 16.5% YoY), and chemicals manufacturing (- 42.8% YoY).

Operating income during the first ten months of the year increased 0.3% YoY while operating profit margins were squeezed marginally lower to 5.7% YoY.

Operating costs for surveyed industries were 0.6% YoY higher.

Accounts receivables increased by 8.4% YoY, while inventories of finished products edged higher by 2.0% YoY.

Inventory turnover days for the first ten months of the year also climbed by 1.1 days on an annualized basis to 20.0 days.

At the time of writing, the CNY improved by 0.2% in trading today versus the Australian dollar.

The US dollar held steady ahead of the home sales data to be released both later today and tomorrow.  


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With China’s property sector in all sorts of trouble, as well as overarching macroeconomic factors such as elevated local public debt and weaker growth trajectories, government officials have been forced to deploy significant stimulus measures in the face of relatively lackluster demand.

Later this week, China will also release official November factory data on Thursday, November 30th, and the Caixin survey for the same on Friday, December 1st.

As per analysts at, corporate profits are expected to improve to CNY 8000.00 billion by the end of this quarter.


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