Prime Highlights
- China’s industrial profits grew at their fastest pace in over a year in April, driven by strong gains in technology, energy, and mining sectors.
- Automobile profits fell 16.8% through April, though government steps to curb price wars are showing early signs of stabilising the sector.
Key Facts
- The EU Chamber of Commerce in China represents European businesses operating across the country and regularly surveys its members on business conditions.
- China’s National Bureau of Statistics tracks industrial profit data across sectors monthly, covering companies with annual revenue above a set threshold.
Background
April saw China’s factory profits rise by 24 percent, which is the highest since November last year. Additionally, this was the quickest rate of growth in over a year. This followed a 15.8% rise in March, showing strong momentum heading into the second quarter.
For the first four months of the year, profits rose 18.2%, up from 15.5% growth in the first quarter. The computing and electronics sector, the largest contributor by profit, more than doubled its earnings from a year ago, though the pace eased slightly in April on a year-to-date basis.
Oil and gas extraction posted an 8.1% profit rise in the January–April period, reversing a 1.4% decline seen in the first quarter. Higher crude prices pushed petroleum processing profits to 40.42 billion yuan (around $5.96 billion), nearly double what the sector had recorded through March alone.
Mining and related sectors saw profits surge fivefold, while iron smelting and rolling swung from a loss in the first quarter to a profit by April.
Automobile manufacturers continued to struggle, with profits falling 16.8% in the first four months of the year. However, this marked a slight improvement from the 17.7% decline recorded through March. EU Chamber of Commerce President Jens Eskelund said government efforts to reduce excessive competition in the auto sector were beginning to show results, but cautioned that confirmation of the trend could take another one to two years.
Furniture manufacturing remained a weak spot, with profit declines deepening to 54.4% through April, compared with 44.9% through March.