<div id="readability-page-1"><div><p>BEIJING - Chinaâs industrial enterprises saw their earnings rise for the first time in three months after producer deflation showed signs of easing.</p><p>Industrial profits climbed 5.3 per cent in December from a year earlier, compared with a plunge of more than 13 per cent in November, according to data released on Jan 27 by the National Bureau of Statistics. Bloomberg Economics had expected a drop of about 11 per cent in December.Â </p><p>Industrial earnings provide a key measure of the financial health of factories, mines and utilities that can affect their investment decisions in the months to come. For the full year, profits rose for the first time since 2021 with a gain of 0.6 per cent.Â </p><p>Profit margins have been under pressure as domestic demand sagged despite government efforts to curb excess competition and cut capacity. The worldâs second-largest economy lost more momentum last quarter, even as industrial production held up well thanks to booming exports.Â </p><p>Chinaâs industry, which is dominated by manufacturing, has suffered from domestic deflation thatâs eating away at income and profits. Producer prices have declined every month for more than three years but had their smallest decrease in over a year in December. Â </p><p>Deflationary pressures have been present since the end of the Covid-19  pandemic as a consequence of a prolonged slump in housing and weak consumer demand. A glut of production capacity in some industries has also led to oversupply, pushing firms to cut prices to survive.Â BLOOMBERG</p></div></div>

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<p>China's industrial profits increased by 5.3% in December, marking the first rise in three months, as producer deflation eases. This follows a significant decline of over 13% in November. For the full year, profits rose by 0.6%, the first increase since 2021. Despite government efforts to reduce competition and capacity, profit margins remain pressured due to weak domestic demand. The easing of deflationary pressures, which have persisted since the end of the Covid-19 pandemic, is attributed to a decline in producer prices, which saw their smallest decrease in over a year in December.</p>

- China's industrial enterprises reported a 5.3% increase in profits in December, marking the first rise in three months, attributed to easing producer deflation.  
- This improvement follows a significant 13% decline in November and contrasts with Bloomberg Economics' expectations of an 11% drop for December.  
- While profits for the full year increased by 0.6%, domestic demand remains weak, with deflationary pressures affecting income and prompting companies to reduce prices amid oversupply.

Chinaâs industrial profits reverse slump after deflation eases

Chinaâs industrial profits reverse slump after deflation eases