Profits of China's major industrial firms expand 15.5% in Q1, boosted by high-tech manufacturing: official data
The profits of China's major industrial enterprises grew at a faster pace in the first quarter, rising 15.5 percent year-on-year and accelerating by 0.3 percentage points compared with the January-February period, the National Bureau of Statistics (NBS) announced on Monday.
NBS statistician Yu Weining said that during the first quarter, facing a complex global economic environment, the Chinese government front-loaded the implementation of more proactive and effective macro policies. As a result, overall industrial activity steadily rebounded, and profits in the equipment manufacturing and high-tech manufacturing sectors grew rapidly.
In March, the profits of major industrial enterprises expanded by 15.8 percent, accelerating by 0.6 percentage points compared with the January-February period, according to the NBS.
In the first quarter, state-controlled enterprises realized total profits of 619.61 billion yuan ($90.64 billion), up 10.1 percent year-on-year. Shareholding enterprises recorded total profits of 1.30 trillion yuan, up 20.9 percent. Foreign-invested enterprises and those funded by investors from Hong Kong, Macao and Taiwan region achieved total profits of 383.73 billion yuan, up 1.2 percent. Private enterprises posted total profits of 430.53 billion yuan, increasing 25.4 percent, the official data showed.
"Industrial profit growth in the first quarter accelerated, which will lay a solid foundation for the economy. The center of profit growth is rapidly shifting toward equipment manufacturing and high-tech manufacturing, driven by the combined effect of macro policy support and the rapid growth of new economic drivers," Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Monday.
Yu noted that the equipment manufacturing sector played a prominent role. In the first quarter, profits of equipment manufacturing enterprises grew by 21.0 percent. Driven by factors such as improved production and rising selling prices, the electronics industry's profits surged by 124.5 percent, becoming the main driver behind the rapid profit growth of the equipment manufacturing sector, said Yu.
High-tech manufacturing registered rapid profit growth. In the first quarter, profits of high-tech manufacturing enterprises rose 47.4 percent year-on-year, contributing 7.9 percentage points to the overall profit growth of all industrial enterprises.
Rapid development in artificial intelligence and semiconductor-related sectors drove strong profit growth in related fields, with fiber optic manufacturing surging 336.8 percent, and optoelectronic device manufacturing expanding 43.0 percent. Rising demand for intelligent products boosted profits in smart unmanned aerial vehicle manufacturing by 53.8 percent and in other intelligent consumer equipment manufacturing by 67.3 percent, said Yu.
The profit growth of electronics, semiconductors, and intelligent manufacturing was mainly boosted by the global semiconductor industry's recovery and the explosive growth of China's domestic artificial intelligence industry, Wang said, adding that surge in demand for intelligent products indicates a significant improvement in the market's capacity to absorb mid-to-high-end products.
Profits of raw materials producers increased by 77.9 percent year-on-year, maintaining strong momentum with high-speed growth. Driven by the rapid development of strategic emerging industries such as aerospace, new energy, and next-generation information technology, profits in the non-ferrous metals sector surged 116.7 percent. The petroleum processing industry swung from losses to profits, recording total profits of 22.94 billion yuan, Yu said.
Wang said that Chinese industrial upgrading led to the higher profit growth, which has strengthened the resilience of the economy. Moreover, profit growth achieved through technological upgrading can enhance enterprises' willingness to invest in research and development, forming a virtuous cycle of "technological progress - improved profitability - reinvestment," Wang said.
Overall, industrial enterprises recorded relatively rapid profit growth in the first quarter. However, it should also be noted that external uncertainties have increased, and the domestic imbalance between strong supply and weak demand needs to be resolved, the NBS statistician said.
In the coming months, China should continue to focus on improving quality and efficiency, in a bid to promote effective qualitative improvement and reasonable quantitative growth, Yu said.