Profit rose 4.2% year-on-year, the slowest rate since April 2020, to 734.2 billion yuan ($115.89 billion), compared with a 9% gain in November.
For 2021, profits of industrial enterprises soared 34.3 percent year on year to 8.7 trillion yuan, the National Bureau of Statistics said.
“In 2021, profits of industrial enterprises have achieved relatively rapid growth, with enterprise efficiency improving steadily,” Zhu Hong, senior statistician of the NBS, said in a statement.
“However, we must recognize that growth rates fell significantly in November and December and that downstream companies, especially small companies, are still facing relatively large operational pressures and the number of loss-making companies is always up,” Zhu added.
Runaway factory inflation in China cooled for the second straight month in December as the government took action against soaring commodity prices as Beijing struggled to blunt the crippling economic effects of the cost increase.
To stabilize a faltering economy, the People’s Bank of China has implemented a series of monetary policies in recent weeks. It unexpectedly reduced borrowing costs on its medium-term loans for the first time since April 2020, and lowered benchmark lending rates.
The world’s second largest economy, which is losing momentum after enjoying a strong recovery from the pandemic, faces multiple challenges as it approaches 2022, due to slowing exports, a downturn in real estate and tough COVID-19 restrictions that have hit consumer spending.
China’s economy grew 4.0% in the fourth quarter from a year earlier, marking its weakest expansion in a year and a half.
Industrial profit data covers large enterprises with annual revenues of more than 20 million yuan from their main activities.
($1 = 6.3354 Chinese yuan)