All signs are pointing to a ‘tough year’ for Chinese businesses

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.