China’s industrial sector has shown stronger growth momentum, with a sharp rebound in profits suggesting a sustained recovery, according to the latest data from the National Bureau of Statistics (NBS).
Profits of China’s major industrial enterprises increased by 4% year-on-year in April 2024, reversing a 3.5% decline registered in the previous month. Revenue growth of these enterprises also saw a turnaround, with a 3.3% expansion recorded last month, compared to a 1.2% drop in March.
Analysts attribute this encouraging data to a combination of government-supportive policies and rising domestic demand, reflecting a steady broader economy.
“As market demand continued to improve and industrial production picked up pace, these enterprises reported better performance last month,” said NBS statistician Yu Weining.
The data showed major industrial enterprises, with an annual main business revenue of at least 20 million yuan (about $2.81 million), had generated 2.09 trillion yuan in total profits in the first four months of this year, a 4.3% year-on-year increase, which is the same as the increase recorded in the first three months of 2024.
75.6% of the 41 major industrial sectors saw an increase in profits during the January-April period this year, rising from a level of 68.3% in the first three months.
Manufacturers saw their profits grow by 8% from a year earlier, and businesses in the power industry logged a 44.1% surge in profits thanks to lower coal costs and increased power generation. However, the mining and gas industries suffered losses during this period.
The equipment manufacturing industry, with a 16.3% profit increase in the first four months, had continued to drive the growth of the whole industrial sector. “The industry has witnessed significant strides in advancing towards high-end, intelligent, and environmentally friendly production, and fostering new quality productive forces,” Yu said.
The electronics industry witnessed a significant surge in profits, recording a remarkable increase of 75.8%, driven by robust demand for smartphones, integrated circuits, and liquid crystal displays. The transportation equipment industry saw a 40.7% profit upswing, thanks in part to fast-growing shipbuilding orders. The automotive industry, meanwhile, registered a 29% profit increase.
Moreover, warming consumer sentiment had resulted in consumer goods production also showing a notable upward trend, with profits climbing by 12%. Across 13 major consumer goods sectors, ranging from furniture to food, all achieved profit growth, with the chemical fiber industry standing out with a whopping profit increase of 181%.
China has rolled out an array of measures to consolidate economic recovery this year, stepping up efforts to bolster the industrial sector and unleash the potential of domestic demand.
Despite this steady industrial recovery, China still faces insufficient domestic demand and a complicated external environment, Yu said, noting that more should be done to cement the positive trend, including accelerating the development of new quality productive forces, promoting industrial upgrades, and assisting enterprises in overcoming difficulties to push forward the high-quality development of the industrial sector.
