China's industrial profits grow at fastest in eight months

Profits at China's industrial firms grew at the fastest pace in eight months in November, but broad weakness in domestic demand remains a risk for company earnings next year.

Industrial profits in November rose 5.4% from a year earlier to 593.9 billion yuan, snapping three months of decline, as production and sales quickened, data from the National Bureau of Statistics (NBS) showed. That compared with a 9.9% drop in October.

For January-November, industrial firms notched profits of 5.61 trillion yuan, down 2.1% from a year earlier, but slightly better than a 2.9% fall in the first 10 months.

The expansion was mostly due to quickening production and sales, while factory-gate prices contracted at a slower pace, said Zhu Hong, an official with the statistics bureau in a statement released alongside the data.

But he cautioned that the rebound may not be an indication of a sustained recovery. "Although the profit growth turned to positive in November, we have to see that the current downward pressure on the economy is still big, and the volatility and uncertainty of profit growth still exist due to multiple factors such as market demand and industrial prices."