China’s industrial profits shrank further in the 11 months of 2022 as strict COVID measures hit production activities in crucial manufacturing hubs and disrupted supply chains.
Reuters cited data from China’s National Bureau of Statistics (NBS) on Tuesday, showing that Industrial profits dropped 3.6% in the January-November period, compared with a 3.0% decline for the first ten months.
Despite the Chinese Communist Party (CCP) easing its controversial COVID-control measures in early December, China’s economy is facing a difficult time as infections surge across the country, causing many people to be unable to work because of infection.
The world’s second-largest economy struggled for most of the year due to COVID, weakening global demand, the ongoing property crisis, and unstable domestic consumption.
Last week, World Economics said that China’s business confidence plunged and might head into recession in 2023. Its survey reflects the negative impact of surging COVID infections on business activity.
China’s other key economic indicators showed signs of a downturn in November, such as shrinking retail sales and significantly decreased property investment.
In November, China’s exports and imports also contracted at a much lower-than-expected level. As a result, its exports shrank by 8.7% yearly, while imports fell by 10.6% as domestic demand weakened.
Last week, the World Bank cut China’s GDP growth outlook to 2.7% in 2022 before recovering to 4.3 % in 2023 as the country reopens the economy.