The Chinese government has announced a series of measures to boost the country's industrial production and alleviate the economic downturn. According to the National Bureau of Statistics, the country's industrial enterprises saw a 4.7% year-on-year (YoY) decline in profit margins in November. This marked a second consecutive month of YoY decline in profit margins, following a 4.3% contraction in October.
The decline in profit margins was larger than expected, according to a survey of economists by Bloomberg. The survey predicted a 6% YoY increase in profit margins, while the actual result showed a 4.7% decline.
The decline in profit margins was driven by a slowdown in production growth, with industrial production growing at a slower pace than expected. The National Bureau of Statistics reported that industrial production grew at an annual rate of 5.7% in the first 11 months of the year, down from 6.1% in the same period last year.
To address the economic downturn, the Chinese government has announced a range of measures, including:
Establishing a mechanism to maintain a reasonable proportion of investment in manufacturing
Creating self-sufficient and manageable supply chains
Boosting the adoption of large equipment updates and take-back policies for old equipment
These measures aim to stimulate domestic demand and support the industrial sector, which accounts for a significant proportion of China's economy.