BEIJING- Profits at China’s industrial firms fell for a third straight year in 2024, official data showed on Monday, underlining the urgency for policymakers to step up support for an economy facing tariff threats from the new Trump administration.
Industrial profits grew 11 percent in December from the same month last year, following a 7.3 percent drop in November, according to National Bureau of Statistics (NBS) data.
For the whole year, earnings at industrial firms dropped 3.3 percent, extending a 4.7 percent decline in the January-November period, NBS data showed. That compares with a 2.3 percent decline in 2023.
China’s GDP grew 5 percent last year, reaching the official target, following extensive government stimulus measures. But the economy has been beset by a stuttering property market, flagging domestic demand and fragile business confidence.
Factory-gate prices in 2024 extended into a second straight year of declines, official data showed, ripping into corporate profits and workers’ incomes.
Policymakers in the second half of the year rolled out multiple rounds of economic stimulus measures, including expanding a consumer goods trade-in scheme to spur demand.
December economic data, released earlier this month, indicated imbalanced growth, with industrial output outperforming retail sales, and unemployment rate ticking higher.
Exports gained momentum in December, in part fueled by factories rushing inventory overseas as they braced for heightened trade risks under a Trump presidency.
US President Donald Trump, who took office on Jan. 20, said the next day his administration was discussing a 10 percent punitive duty on Chinese imports.
Profits at state-owned firms dropped 4.6 percent in 2024, those at foreign firms fell 1.7 percent and private-sector companies recorded a 0.5 percent rise in earnings, according to a breakdown of the NBS data.
Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.74 million) from their main operations.
China’s economy grew 5 percent last year, matching the government’s target, but in a lopsided fashion, with many people complaining of worsening living standards as Beijing struggles to transfer its industrial and export gains to consumers.
The imbalance raises concerns that structural problems may deepen in 2025, when China plans a similar growth performance by going deeper into debt to counter the impact of expected US tariff hikes.
December data showed industrial output far outpacing retail sales, and the unemployment rate ticking higher, highlighting the supply-side strength of an economy running a trillion-dollar trade surplus, but also its domestic weakness.