Despite the War, Chinese IT Firms Thrive... April Industrial Profits Up 24.7%

National Bureau of Statistics Announces April Industrial Profits
Consumption Slump and Real Estate Downturn Continue to Weigh
Oil and Gas Extraction Industry Rebounds After Ending Contraction

Despite the ongoing Middle East conflict, China's industrial profits in May surged by 24.7% year-on-year, marking the fastest growth in over two years. This robust increase was driven by strong profits in the raw materials and high-tech sectors. However, sluggish consumption and the ongoing real estate downturn remain significant burdens on the Chinese economy.

In September 2021, employees are assembling Automated Guided Vehicles (AGVs) at the Longwei Robot Factory located in Tianjin, China. Photo by Reuters Yonhap News Agency

According to Chinese business media Caixin and U.S. broadcaster CNBC, the National Bureau of Statistics of China announced on the 27th that industrial profits in April rose by 24.7% compared to the same period last year. This figure far exceeds the March growth rate of 15.8% and, according to financial data provider Wind, represents the highest level since November 2023. As a result, the cumulative industrial profit growth rate from January to April reached 18.2%, higher than the first quarter figure of 15.5%.

By industry, the computer and electronic equipment manufacturing sector led the improvement in performance. For the January-April period, profits in this sector increased by 110% compared to last year. In this regard, Yu Weining, Chief Statistician of the Industrial Statistics Department at the National Bureau of Statistics, explained that "the increase in profits in the electronics sector was largely driven by rising demand and a recovery in prices," and noted that the sector contributed 43.8% of the total growth in industrial profits.

Profits in the oil and gas extraction industry grew by 8.1% from January to April, recovering from a contraction in the first quarter. Due to rising international oil prices, profits in oil refining soared to 40.4 billion yuan (approximately 8.93 trillion won). The growth rate of profits in the chemical raw materials and chemical products manufacturing sector reached 73.4%, up 18.9 percentage points from the first quarter.

However, experts pointed out that the improvement in industrial profits has been concentrated in only a few sectors. Hao Zhou, Chief Economist at Guotai Junan International, commented, "While industrial profits surged due to rising producer prices and energy costs, the improvement in earnings has been largely limited to the raw materials and high-tech industries."

In fact, weak domestic demand in China persists. The industrial production growth rate in April was only 4.1%, while retail sales rose by just 0.2%. Fixed asset investment from January to April also declined due to the ongoing real estate downturn. However, exports in April, measured in U.S. dollars, increased by 14.1%, and imports rose by 25.3%, maintaining a relatively solid trend.

China's industrial profit statistics cover companies with annual revenue of at least 20 million yuan (approximately 4.4 billion won). This figure is regarded as a key indicator for assessing the strength of the manufacturing sector and the domestic economy.

This content was produced with the assistance of AI translation services.