Hundreds of listed Chinese companies have slashed their forecasts for 2018 earnings this week in a sign that an economic slowdown and worries over US-China trade friction are beginning to bite.

Companies across a range of sectors from livestock producers to airlines to securities firms have submitted updated guidance to the country's two stock exchanges, warning that their balance sheets deteriorated due to a range of factors.

A Bloomberg News compilation found that around 440 companies had made such disclosures on Wednesday alone, a day ahead of a deadline to do so.

Concern over China's economic slowdown has increased in recent months, especially after data revealed earlier in January showed that GDP grew 6.6 percent in 2018, the slowest rate in 28 years.

Analysts say some sectors of the economy also are under either direct pressure from the China-US tariff war or putting off investment and expansion moves until the dust settles.

Companies lowering their outlooks have included telecommunications supplier ZTE, China Life Insurance, China Southern Airlines, and a slew of others.

"We're only just seeing the beginning of deterioration in corporate earnings as the economy slows further," Yu Dingheng, a fund manager at Shenzhen Flying Tiger Investment & Management told Bloomberg.

"Things will continue to go downhill for firms seeing business slowing and even as the macro-economy recovers, these individual firms will never be what they were."

E-commerce leader Alibaba appeared to offer a ray of hope with its announcement Wednesday of earnings for the October-December quarter, with profit up 37 percent.

But Alibaba, seen as a bellwether of overall consumer sentiment in China, also said revenue growth slowed to 41 percent in the period, the slowest increase in more than two years.

A number of global brands across several sectors also have recently warned they will take a hit from China's deceleration.

Apple stunned markets earlier this month when it said iPhone sales and overall revenues would be below most forecasts, citing economic weakness in China -- one of its biggest markets -- and the trade frictions.

Economists also say a year-long effort by China to rein in dangerously high levels of domestic credit had slowed economic momentum.

But research houses have noted bright spots in the economy such as e-commerce, and some predict that a resolution of the tariff war could lift a big weight off economic sentiment.

Full-year results for many Chinese companies are expected to be released beginning in March.

China's factory activity shrinks in January
Beijing (AFP) Jan 31, 2019 - China's manufacturing activity contracted for a second consecutive month in January, official data showed Thursday, another sign of the country's economic slowdown.

The Purchasing Managers' Index (PMI), a gauge of factory conditions, came in at 49.5 for the month, up slightly from 49.4 in December, according to the National Bureau of Statistics (NBS).

Although this marks the first uptick in four months, it remained below the 50.0 mark separating expansion from contraction.

"The expansion of production in the manufacturing sector stepped up slightly," NBS analyst Zhao Qinghe said in a statement.

Nie Wen, an economist at Huabao Trust in Shanghai, told Bloomberg that January activity was lifted by the front-loading of production before China's Lunar New Year holiday next week and a "relatively big issuance of municipal bonds and corporate bonds, both of which helped maintain demand".

But, Nie warned, "the rebound will be a short-lived one".

Many businesses close for the Chinese New Year, with workers heading home to celebrate the week-long holiday.

"While the official manufacturing PMI didn't weaken any further in January, it still suggests that the economy lost momentum at the start of the year," Marcel Thieliant, senior economist at Capital Economics, wrote in a reasearch note.

China reported its slowest economy growth in almost three decades in 2018, losing more steam in the last quarter as it battles a massive debt pile and a US trade war.

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The Space Media Network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceMediaNetwork Contributor $5 Billed Once credit card or paypal		SpaceMediaNetwork Monthly Supporter $5 Billed Monthly paypal only

Businesses struggle as cracks appear in China's economy
Beijing (AFP) Jan 27, 2019
Cracks are opening in China's mighty economy: investors are backing away from deals, factories are moving abroad and companies are shedding jobs. The world's second-largest economy is losing steam, hitting its slowest growth in almost three decades last year, and flagging further in recent months. While gross domestic product grew at 6.6 percent in 2018 - a rate that would be the envy of most nations - China's efforts to cut its debt mountain have weighed on the economy. Private businesses ... read more