China’s industrial firms recorded their third consecutive year of profit decline in 2024, emphasizing the need for stronger policy measures to support an economy facing new tariff threats from the Trump administration.
According to data released by the National Bureau of Statistics (NBS), industrial profits rose by 11% in December year-on-year but dropped by 3.3% for the entire year. This followed a 4.7% decline during the January-November period, worsening from the 2.3% decrease reported in 2023.
China’s GDP grew by 5% in 2024, meeting official targets, driven largely by government stimulus efforts. Despite this, the economy struggled with a sluggish property sector, low domestic demand, and declining business confidence. Factory-gate prices fell for the second straight year, reducing corporate earnings and worker incomes.
In response, authorities introduced several stimulus measures in the second half of the year, including an expanded consumer goods trade-in program aimed at boosting demand. Economic indicators revealed mixed results, with industrial production outpacing retail sales but unemployment rates showing an increase.
Exports showed some recovery in December as factories rushed to ship goods abroad ahead of potential trade disruptions. On January 21, U.S. President Donald Trump announced plans to impose a 10% punitive tariff on Chinese imports, raising concerns about future trade risks.
The NBS data highlighted varying impacts across sectors. State-owned enterprises experienced a 4.6% decline in profits, while foreign companies reported a 1.7% decrease. In contrast, private-sector firms achieved a modest 0.5% growth in earnings.
The industrial profit data covers companies with annual revenues of at least 20 million yuan ($2.74 million) from their core operations. The figures underscore the ongoing challenges for China’s economy and the critical need for policy adjustments to address external and domestic pressures.
