All signs are pointing to a ‘tough year’ for Chinese businesses
May 29, 2019 @ 13:18 UTC
Judging by the latest reports from Chinese companies, the world’s second-largest economy still has a challenging stretch ahead.
Take earnings reports in the last few weeks from the country’s technology giants:
Search engine Baidu posted its first quarterly loss since listing in 2005, according to Reuters.
Gaming and social media company Tencent reported its slowest quarterly revenue growth on record, up 16%, according to Reuters. That’s despite a boost in revenue from its financial technology and cloud businesses.
Alibaba posted solid growth for the latest quarter. But excluding acquisition costs, Alibaba’s 2019 fiscal year revenue grew 39%, missing last year’s forecast. For the 12 months ahead, the e-commerce company expects revenue growth of at least 33%.
Then on Monday, China’s National Bureau of Statistics said industrial profits fell 3.4% in the first four months of this year.
Private businesses are key to the economic and social well being of China since they contribute to 90% of new jobs and 70% of technological innovation and new products, according to state news agency Xinhua. And for a country controlled by a single party, maintaining social stability is key.