BEIJING: China’s economy is maintaining strong momentum as major industrial enterprises posted solid profit growth in the first quarter.
This points to robust economic resilience of the world’s second-largest economy despite mounting external uncertainties, officials and experts said on Monday.
Moreover, the solid profit performance was most evident in equipment manufacturing and high-tech manufacturing sectors.
This suggests that front-loaded macro policy support is feeding through to corporate earnings while China’s industrial upgrade continues to gain traction.
However, analysts cautioned that the recovery in industrial profitability may not yet be on firm footing, given the uneven profit improvement across sectors and continued pressure from tighter global energy markets linked to Middle East tensions, highlighting the need for ramping up targeted policy support.
During the first quarter, industrial enterprises with an annual main business revenue of at least 20 million yuan (US$2.82mil) saw their total profits rise 15.5% year-on-year (y-o-y) to 1.696 trillion yuan, 0.3 percentage point faster than the growth recorded in the January to February period, data from the National Bureau of Statistics showed on Monday.
Furthermore, the robust growth in industrial profits, according to Yu Weining, a statistician with the bureau, was supported by more proactive macroeconomic policies.
“In the first quarter, amid multiple economic headwinds, policymakers stepped up macroeconomic regulation and front-loaded more proactive and effective macroeconomic policies, helping the industrial economy recover steadily,” Yu added.
Emerging growth drivers were a key contributor.
“Strong gains in equipment manufacturing and high-tech sectors, coupled with double-digit profit growth in the raw materials manufacturing sector, pointed to continued improvement in industrial firms’ profitability.”
According to the NBS, profits in equipment manufacturing industries surged 21% y-o-y during the first three months, contributing 6.8 percentage points to the overall profit growth of major industrial firms. — China Daily/ANN
