Industrial profit slide in March raises questions about China's economic recovery pace

According to official data released on April 27, 2024, industrial profits in China fell short in March and showed reduced growth for the quarter compared to the preceding two months. This raises concerns about the robustness of the recovery in the world's second-largest economy.

In the first quarter, China's industrial firms saw a 4.3 per cent increase in cumulative profits, reaching RMB 1.5 trillion ($207.0 billion), as per data from the National Bureau of Statistics (NBS). This growth rate is slower compared to the 10.2 per cent rise observed in the initial two months of the year.

In March, profits experienced a 3.5 per cent decline compared to the previous year. While the National Bureau of Statistics (NBS) didn't provide a breakdown of monthly figures for January and February, they indicated in March that monthly figures had been on the rise since August 2023. This information aligns with various economic indicators for March, including retail sales and industrial output, which all indicate a weak domestic demand despite robust GDP growth in the first quarter.