April Sees Surge in China’s Industrial Profits: How Beijing’s Policies Are Softening Tariff Blow

China’s industrial profits saw a rise for the second month in a row in April, thanks to government support for businesses amid ongoing challenges. Major industrial firms reported a 3% increase in profits year-on-year, up from 2.6% in March, according to data from the National Bureau of Statistics.

For the first four months of the year, profits climbed 1.4% overall, driven mainly by gains in high-tech and equipment manufacturing. Despite U.S. tariffs and ongoing economic pressures, Chinese exports have found alternative markets, reducing the potential negative effects of trade tensions.

Experts have noted that recent agreements between Washington and Beijing to lower tariffs have provided some relief. Tariffs on Chinese imports have decreased to 51.1%, while China’s tariffs on U.S. goods stand at 32.6%, as reported by the Peterson Institute for International Economics.

Lynn Song, chief economist for Greater China at ING, found the profit increase in April promising. She highlighted that manufacturing firms managed to improve their bottom lines despite difficult conditions. Bruce Pang, an academic at CUHK Business School, emphasized that government policies aimed at supporting private sectors have been crucial in counteracting some of the pressures from tariffs.

High-tech manufacturing showed particular resilience, with profits growing by 9% from January to April. Industries like biopharmaceuticals and aircraft manufacturing made notable progress. Additionally, household appliance manufacturers experienced a profit boost of over 15%, thanks to consumer trade-in programs.

However, not all sectors thrived. Mining profits fell 26.8%, while manufacturing and utilities gained 8.6% and 4.4%, respectively. State-owned industrial firms reported a 4.4% profit drop, whereas private and foreign-invested companies enjoyed profits rising by 4.3% and 2.5%.

Weining Yu from the NBS noted that while there is clear resilience within industries, challenges like weak demand and fluctuating prices remain. Certain industries continue to struggle, such as the automobile sector, which faced a 5.1% profit decline, and textiles and apparel, which saw a 12.7% drop due to shifting demand.

Overall, China’s industrial profits showed a 0.8% increase in the first quarter, ending a series of declines that began in the third quarter of the previous year. The boost in profits came alongside a 6.1% rise in industrial output, although retail sales growth dipped to 5.1%, highlighting ongoing supply-demand issues in the economy.

This snapshot reflects the complex landscape of China’s economy, revealing both strengths and vulnerabilities amid changing global dynamics.



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