China industrial profits surge in November

The news: China's industrial profits posted double-digit gains in November as overall manufacturing improved, despite soft demand continuing to limit expectations for business growth.

The numbers: Industrial profits rose 29.5% for the month, alongside a pickup in industrial output in November, data from the National Bureau of Statistics (NBS) showed. The gains came on top of a 2.7% increase in October. Industrial profits have now extended gains for four months in a row.

The context: China has put in place a slew of pro-growth measures to buttress a patchy post-COVID recovery. The world’s second biggest economy is widely expected to achieve the government's growth target of around 5% for this year. Macro policies to bail out industrial firms, a low statistical base last year and seasonality have all contributed to the uptrend, China Everbright Bank analyst Zhou Maohua told Reuters. The overall manufacturing sector has shown improvement but there is unevenness across sectors with high-tech and equipment manufacturers achieving rapid profit growth and property-related sectors being squeezed.