Data published by the National Bureau of Statistics of China (NBS) showed that in the period from January to February, the profit of industrial firms fell by 22.9% per annum, amounting to 887.21 billion yuan. NBS said that over the past year, the profits of industrial enterprises decreased by 4%. The drop in profit in January was due to weak demand and high production costs.
According to the report, in the first two months of 2023, the profit of state-owned industrial enterprises fell by 17.5% after an increase of 3% in 2022, while the profit of private industrial enterprises decreased by 19.9% after a fall of 7.2% last year. Meanwhile, foreign firms reported a 35.7% drop in profits compared to January-February 2022. In general, in the first two months of 2023, profits decreased in 28 of the 41 main industrial sectors, with the largest drop recorded in the production of computers, telecommunications and other electronic equipment (-77.1%).
Economists note that today's data continued a series of economic indicators pointing to an uneven recovery of the economy after a long battle against the COVID. The government is keen to get the economy back on track and earlier this month set a modest growth target for this year (about 5%). Meanwhile, in March, for the first time this year, the Central Bank unexpectedly reduced the amount of cash that banks must hold as reserves to help support the economic recovery.