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Changes in the Profit Growth Rate of Industrial Enterprises in 2018: Features and Reasons (No.9, 2019)
2019-03-20
By Jia Shen, Department of Development Strategy and Regional Economy, DRC
Research Report, No.9, 2019 (Total 5509) 2019-1-22
Abstract: The profit rate of China’s various types of industrial enterprises in 2018 has witnessed a resonate downturn due to the decline in the growth rate of their main business income in view of performance indicators. Apart from that, the rigid increase of corporate management expenses and other expenditure further eroded their profits. Since 2017, the debt expansion of private enterprises and the increase in their holding of low-yielding liquid assets also had an impact on their profit growth. From the middle of 2017 till now, the major economies in the world have been suffering from downward pressure, which leads to the plummeted growth rate of China’s commodity export and it is also the main driving force for the marginal change in China’s industrial demand in recent two years. For the next stage, the dynamic equilibrium of industrial system and its coordinated development needs to be taken as an important goal in building a modernized economic system; efforts need to be made in the research to solve the problems caused by cost on profits through counter-cyclical adjustment which will effectively stabilize the aggregate demand; with bottom-line and strategic opportunity thinking, the monitoring and assessment for the downward trend of major economies needs to be strengthened so as to better handle the new round of global volatility that might emerge.
Key words: industrial enterprises, profit growth, aggregate demand
