China’s industrial sector showcased resilience in April, with profits continuing to rise despite ongoing trade tensions with the United States. According to a report by Reuters, industrial profits increased by 3.0% in April, following a 2.6% rise in March, illustrating the sector’s ability to withstand external pressures.
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Data from the National Bureau of Statistics (NBS) revealed that industrial profits climbed 1.4% year-on-year during the January to April period, reaching 2.1 trillion yuan ($292.28 billion). This growth was supported by a combination of better-than-expected export performance and domestic policy measures aimed at sustaining economic momentum.
However, challenges remain, as factory-gate prices continued to contract for the 31st consecutive month, marking their steepest decline in six months in April. This deflationary trend has raised concerns over profit margins for companies, prompting the Chinese government to implement a broad stimulus plan, including interest rate cuts and liquidity injections, to bolster economic recovery.
While state-owned enterprises experienced a 4.4% decline in profits, private-sector companies and foreign firms saw gains of 4.3% and 2.5% respectively, highlighting varied performance across different sectors. The ongoing trade tensions, particularly the tariffs imposed by the U.S., pose a risk to China’s export-driven recovery, with potential job losses if exports to the U.S. significantly decrease.
