China-the world's fourth-largest economy, grew at the slowest pace in 5 years in Q3-08 amid reduced export demand triggered by the global financial crisis. Exports fell for the first time in 7 years in November, imports plunged and manufacturing contracted by record. As companies reduce output in a bid to cope with deteriorating demand and commodity prices plunge amid the dampening of the economy, industrial companies' profits in China rose at one seventh the rate as compared to last years' figures. Overcapacity in almost all industries and record drops in some commodity prices are estimated to hurt profits further. Net income increased 4.9% in the first 11 months of 2008 to 2.41 trillion yuan (US$353 bln) as compared to profit growth of 36.7% recorded a year ago. The double-whammy of cooling demand and plunging prices have caused company profits to worsen seriously. Profits are estimated to shrink as much as 15% over the next 6 months, causing companies to shed more workers, raising unemployment. In 2008 more than 10 million migrant workers had lost their jobs as of the end of November.
The World Bank forecast China's economy will grow 7.5% in 2009, which would be the slowest pace in almost two decades. China aims for 8% growth in 2009 and production accounts for 43% of the nation's gross domestic product. China has pledged to spend 4 trillion yuan (US$585 mln) in a stimulus package aimed at spurring growth and limiting unemployment in the world's most populous nation. The central bank on Dec. 22 lowered its key lending rate for the fifth time in three months to help trim corporate funding costs.
26-Dec-08 
{{comment.DateTimeStampDisplay}}
{{comment.Comments}}