China's industrial sector gathers steam as April produces profit rebound

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A worker works at an assembly line of Voyah, a Chinese luxury electric auto brand, in Wuhan, central China's Hubei Province, April 1, 2024. [Photo/Xinhua]

China's industrial sector posted stronger growth momentum last month, with a sharp profit rebound suggesting sustained recovery.

Profits of China's major industrial enterprises increased by 4 percent year on year in April 2024, reversing a 3.5 percent decline registered in the previous month, the National Bureau of Statistics (NBS) said Monday. Revenue growth of such enterprises also saw a turnaround with a 3.3 percent expansion recorded last month, compared to a 1.2 percent drop in March.

Analysts said this encouraging data was produced by a combination of government supportive policies and rising domestic demand, and that it reflected a steady broader economy.

As market demand continued to improve and industrial production picked up pace, these enterprises reported better performance last month, NBS statistician Yu Weining said.

The data showed major industrial enterprises, with an annual main business revenue of at least 20 million yuan (about 2.81 million U.S. dollars), had generated 2.09 trillion yuan in total profits in the first four months of this year, a 4.3 percent year-on-year increase, which is the same as the increase recorded in the first three months of 2024.

Yu said 75.6 percent 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 percent in the first three months.

Manufacturers saw their profits grow by 8 percent from a year earlier and businesses in the power industry logged a 44.1 percent surge in profits thanks to lower coal costs and increased power generation. However, the mining and gas industries suffered losses during this period.

Notably, the statistician pointed out that the equipment manufacturing industry, with a 16.3 percent 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.

In breakdown, the electronics industry witnessed a significant surge in profits, recording a remarkable increase of 75.8 percent, driven by robust demand for smartphones, integrated circuits, and liquid crystal displays. The transportation equipment industry saw a 40.7 percent profit upswing, thanks in part to fast-growing shipbuilding orders. The automotive industry, meanwhile, registered a 29 percent profit increase.

Moreover, Yu added that warming consumer sentiment had resulted in consumer goods production also showing a notable upward trend, with profits climbing by 12 percent.

Across 13 major consumer goods sectors, ranging from furniture to food, all achieved profit growth. The chemical fiber industry stood out in this sector, recording a whopping profit increase of 181 percent.

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.

The central government announced a plan in March to promote large-scale equipment upgrades and trade-in of consumer goods, a move forming part of its efforts to boost domestic demand and support continuous economic growth, which is likely to create a market worth over 5 trillion yuan annually for the next several years.

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.

Greater efforts should be made to accelerate the development of new quality productive forces, promote industrial upgrades, and assist enterprises in overcoming difficulties, thereby pushing forward the high-quality development of the industrial sector, Yu explained.

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