China’s 2023 Industrial Profit Growth and Foreign Policy Development

China's industrial sector is demonstrating a significant rebound, marking a phase of economic stabilization and recovery. This positive trend is reflected in the consistent rise in profits across various industrial firms, as reported by the National Bureau of Statistics (NBS). Accompanying these industrial shifts are strategic adjustments in foreign workforce policies and new initiatives in Beijing's service sector, further indicating China's evolving economic landscape.

Key Highlights

  • Industrial Profit Growth: For the third consecutive month, China’s industrial firms, with annual revenues of 20 million yuan or more, have experienced profit increases, with a 2.7% year-on-year rise in October.
  • Sectoral Performance: The raw material production sector and consumer goods manufacturing have shown remarkable profit surges, while the utility sector has seen significant growth.
  • Foreign Workforce Policy Adjustment in Guangzhou: Effective from July 13, 2023, the salary standards for foreigners working in China have been revised, impacting the classification of foreign high-end talents.
  • Beijing’s Service Sector and Foreign Talent Initiatives: The State Council has approved plans to transform Beijing into a demonstration zone for service sector expansion, including several initiatives for foreign and regional professionals.

Industrial Profits and Economic Stabilization

The consistent increase in profits of China’s industrial firms is a clear indicator of the country’s economic recovery. After witnessing an 11.9% rise in September, these firms reported a further 2.7% increase in October. However, a broader view from January to October reveals a 7.8% decline in profits, totaling 6.12 trillion yuan, which is nevertheless an improvement from the earlier 9% drop. Notably, out of 41 major industrial sectors, 30 reported improved profitability, with the utility sector experiencing a notable 40% year-on-year growth. The raw material production sector also stood out with a 22.9% profit increase in October, buoyed by a revival in downstream demand. Similarly, consumer goods manufacturing recorded a 2.2% profit rise in the same period.

Adjustments in Foreign Workforce Policies

Guangzhou’s recent policy shift, implemented from July 13, 2023, has redefined salary standards for foreign workers in China, setting the new benchmark at 10,499 yuan per month or 125,388 yuan per year. This adjustment plays a crucial role in determining the classification of Class A and Class B foreign high-end talents, based on their salary multiples in relation to this new standard.

Beijing’s New Initiatives for Service Sector and Foreign Talent

In a strategic move, Beijing is set to become a comprehensive demonstration zone for an open service sector. Endorsed by the State Council, this initiative includes allowing qualified foreign and regional doctors to establish clinics in Beijing and facilitating part-time work for international students. The plans also extend to permitting overseas individuals to engage in securities and futures trading consulting, optimizing the salary remittance process for foreign talents, and ensuring the free flow of funds related to foreign investments.

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