Chinese industrial profits see biggest drop since 2010 in January/February

Industrial company profits in China plummeted at their quickest pace since 2010 as the coronavirus pandemic forced authorities into a country-wide lockdown at one point.

According to the National Bureau of Statistics, industrial profits crashed by 38.3% in the first two months of 2020 when compared to a year earlier to reach 410.7bn yuan.

That followed a 6.3% drop in December.

Profits of manufacturing firms were hardest hit, including those from automobile, electrical equipment, chemicals and electronics firms.

Of 41 industrial sectors, only four saw profits rise, tobacco, non-ferrous metals, oil and gas exploration, and non-staple agricultural goods processing.

In the motor vehicles space, profits saw an "eye-watering 80% plunge", said Freya Beamish at Pantheon Macroeconomics.

"The data also suggest that the hit to bottom lines came despite a sharp pullback in operating costs, backing up the story from the PMIs, which imply headcount was slashed," she said.

"Overall, these data should leave the authorities in no doubt that they need to do more to stem the bleeding."