10-month profits at industrial firms in China fell 3 percent

Profits of industrial companies in China fell 3 percent in January-October 2022 compared with the same period last year.

According to data from the National Bureau of Statistics (UIB), the total profits of industrial enterprises with an annual turnover of more than 20 million yuan (about 2.79 million US dollars) amounted to 6.98 trillion yuan (about 970,000 million dollars) in 10 months.

While the total income of the industrial establishments increased by 7.6 percent and their expenses increased by 10.6 percent, their profits decreased by 3 percent annually. Profit increases were recorded in 19 of 41 industries, while profitability fell in 22 of them.

While industrial companies’ profits rose 8.5 percent in the first quarter, the increase slowed to 1 percent at the end of the second quarter and fell to 2.3 percent at the end of the third quarter.

MEASURES OF THE EPIDEMIC LESS ECONOMIC EXPECTATIONS

In the spring of this year, the impact of the Covid-19 restrictions on China’s economy was clearly felt, especially in Shanghai, the country’s largest city, in cities with large populations and home to critical industries and trade lines. .

Economic performance, measured in many fields, fell to its lowest levels since the first months of the Covid-19 outbreak.

Although the number of cases increased in the country in autumn with the spread of highly contagious sub-variants of Omicron, the fact that there were no signs that the epidemic measures that interrupted economic activities would change in the last quarter negatively affects economic expectations and the trust. .

THE ECONOMIC COST OF THE CASE ZERO STRATEGY IS DISCUSSED

While the Chinese economy grew 3 percent in the first three quarters of 2022, it is unclear whether the government’s growth target of 5.5 percent for this year will be achieved, due to rising Covid-19 cases. and to the worsening of the external conditions with the autumn. .

China is implementing a “zero case” strategy against the Covid-19 outbreak, which aims to suppress cases where they arise and cut the chain of transmission.

The strategy calls for strict and far-reaching measures, such as quarantine, travel restrictions, mass testing and restrictions on activities by companies in the manufacturing, trade and service sectors. In addition to interfering with the normal flow of life, the measures also generate discussions in terms of their economic costs. (AA)