China industrial profits slump in first two months of 2023

China’s industrial profits slumped in the first two months of the year as the effects of Covid curbs continued to take their toll.

According to the National Bureau of Statistics, industrial profits slid 22.9% on the year, having fallen 4% in 2022.

Manufacturing profits tumbled 32.6% following a 13.4% decline in 2022.

Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said: "The sharp fall in industrial profits is likely to moderate from March onwards, as the economic reopening leads to climbing domestic sales and operating income. This will be partly offset by continued price weakness, as supply is likely to be larger than demand.

"Exports are dropping, even as domestic demand is reviving only gradually. In addition, more industrial capacity is set to come on line as a result of manufacturing investment over the last few years, encouraged as part of growth support policies."