China's National Bureau of Statistics Releases Data for January to April
Profits Increase for Two Consecutive Months After Weakness in January and February
Effectiveness of Chinese Government’s Economic Stimulus Measures Confirmed
Even during April, when trade tensions between the United States and China reached their peak, Chinese industrial companies continued to show solid profitability. It appears that the Chinese government's economic stimulus measures, aimed at mitigating the impact of U.S.-imposed tariffs, proved effective.
According to the National Bureau of Statistics of China on May 27, the total profit of industrial enterprises for the cumulative period from January to April this year amounted to 2.11702 trillion yuan (approximately 402 trillion won), representing a 1.4% increase compared to the same period last year. This figure is higher than the 0.8% growth recorded in the first quarter.
While the total industrial profit had decreased by 0.3% year-on-year during January and February, it rose by 2.6% in March alone, resulting in an overall 0.8% increase for the first quarter. In April, the year-on-year profit growth rate reached 3.0%, surpassing the previous month’s figure.
April was the month when U.S. President Donald Trump imposed high tariffs of up to 145% on imports from China. In response, China retaliated with its own counter-tariffs, effectively resulting in a mutual trade blockade between the two countries. The two sides only agreed to mutually withdraw tariffs on May 12.
U.S. financial media outlet CNBC pointed out that the increase in profits among Chinese industrial companies was mainly due to Beijing’s support policies for the private sector. These support measures are analyzed to have partially offset the negative effects of the tariffs.
By type of company, private enterprises played a leading role. From January to April, profits of state-owned enterprises decreased by 4.4% compared to last year, while profits of private companies increased by 4.3%, and profits of foreign-invested companies, including those from Hong Kong, rose by 2.5%.
By industry, profits in the high-tech manufacturing sector increased by 9%. The bio-manufacturing industry (24.3%) and aircraft manufacturing industry (27.0%) saw significant improvements. With government support for artificial intelligence (AI) strategies, the semiconductor equipment manufacturing industry (105.1%), electronic circuit manufacturing industry (43.1%), and integrated circuit manufacturing industry (42.2%) surged. Profits in smart car equipment manufacturing (177.4%), smart unmanned aerial vehicle manufacturing (167.9%), and wearable smart equipment manufacturing (80.9%) also increased significantly.
In contrast, nonferrous metal mineral products (-1.6%), chemical raw materials and chemical products manufacturing (-4.4%), automobile manufacturing (-5.1%), and coal mining (-48.9%) all recorded declines compared to the same period last year. Lin Song, chief economist for China at ING Bank, explained, "In particular, the automotive industry was hit by fierce price competition, while the apparel industry suffered due to a loss of demand."
As of the end of April, accounts receivable at the surveyed companies increased by 9.7% year-on-year, and finished goods inventories rose by 3.9%, according to the National Bureau of Statistics.
Wu Weining, a statistician at the National Bureau of Statistics, stated, "The stable recovery of industrial company profits demonstrates the strong resilience and shock resistance of our country's industry." However, he also pointed out, "There are still many external variables in the international environment, insufficient demand, and falling prices, so it is necessary to continue strengthening the foundation for the recovery of corporate profitability."
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