China’s industrial sector continued to demonstrate resilience in April, with profits expanding despite escalating trade tensions with the United States and persistent deflationary pressures domestically, according to official data released on Tuesday.
The National Bureau of Statistics (NBS) reported that industrial profits grew by 1.4% year-on-year during the January to April period, reaching 2.1 trillion yuan (US$292.28 billion). This represents an acceleration from the 0.8% gain recorded in the first quarter, which had marked a turnaround from a 0.3% decline over the first two months of the year.
On a monthly basis, April saw a 3% increase in industrial profits, up from a 2.6% rise in March, indicating a sustained recovery in the sector.
These developments come against the backdrop of renewed trade friction between the world’s two largest economies. In April, US President Donald Trump announced sweeping “reciprocal tariffs,” exempting most countries but imposing levies of 145% specifically on Chinese imports. The tit-for-tat measures have reignited concerns over the future of China’s export-driven recovery, with analysts warning that a 50% drop in exports to the United States could result in up to 16 million job losses if the recent truce between Beijing and Washington fails to solidify into a more permanent arrangement.
Recent economic data has presented a mixed outlook. While export figures have surpassed expectations, factory output and retail sales have exhibited signs of deceleration. Concurrently, factory-gate prices registered their steepest decline in six months during April, contracting for the 31st consecutive month. This trend has heightened fears of deflation and added further pressure on corporate profit margins.
In response, Chinese authorities have reiterated their commitment to reinforcing economic stability. Earlier this month, Beijing unveiled a broad stimulus package aimed at invigorating growth, which includes interest rate reductions and substantial liquidity injections.
In addition, policymakers and major e-commerce platforms have pledged increased support for exporters affected by tariffs, encouraging them to shift focus towards domestic markets.
Performance among different types of enterprises varied during the first four months of the year. State-owned firms saw profits decline by 4.4%, while private-sector enterprises recorded a 4.3% increase. Foreign-invested firms posted a modest 2.5% gain, according to the NBS breakdown.
The NBS data covers industrial companies with annual revenues of at least 20 million yuan from their core operations.
-Reuters
