China's industrial companies saw their profits decline for the third consecutive year in 2024, according to data released on Monday. This highlights the pressing need for policymakers to enhance support for an economy grappling with tariff threats from the new Trump administration. 

In December, industrial profits rose by 11% compared to the same month last year, bouncing back from a 7.3% drop in November, as reported by the National Bureau of Statistics (NBS). However, for the entire year, earnings for industrial firms fell by 3.3%, following a 4.7% decline in the January-November period. This is a drop compared to a 2.3% decrease in 2023.

China's GDP managed to grow by 5% last year, hitting the official target, thanks to significant government stimulus efforts. Still, the economy has been struggling with a sluggish property market, weak domestic demand, and shaky business confidence. 

Factory-gate prices continued to decline for a second year in 2024, impacting corporate profits and workers' earnings. In response, policymakers introduced several rounds of economic stimulus in the latter half of the year, including a consumer goods trade-in program to boost demand.

Recent economic data from December showed uneven growth, with industrial output outpacing retail sales and a slight increase in the unemployment rate. Exports picked up in December, partly due to factories sending inventory abroad in anticipation of increased trade risks under Trump’s presidency. 

On January 20, U.S. President Donald Trump, who had just taken office, announced that his administration was considering a 10% punitive tariff on Chinese imports. 

According to the NBS data breakdown, profits at state-owned enterprises fell by 4.6% in 2024, while foreign firms saw a 1.7% drop, and private-sector companies experienced a slight 0.5% increase in earnings. The industrial profit figures pertain to firms with annual revenues of at least 20 million yuan ($2.74 million) from their main operations.