China's industrial enterprises achieved a significant turnaround in profitability in the first quarter of 2025. Profits of above-designated industrial enterprises rebounded from a 3.3 percent decline year-on-year in 2024 to a 0.8 percent increase. In March alone, profits shifted from a 0.3 percent decline in January-February to a 2.6 percent rise, signaling a notable improvement, according to data released by the National Bureau of Statistics (NBS) on Sunday.
In the first quarter, profits of large-scale industrial enterprises continued to recover. Despite a more complex and challenging external environment with rising uncertainties, China's macroeconomic policies have proven effective since the start of the year. New and existing policies have worked together to give the industrial economy a strong start, said NBS statistician Yu Weining in a note.
Coordinated policy measures as well as the equipment manufacturing and high-tech manufacturing sectors played a crucial role in driving this positive shift, bolstering the overall quality and efficiency of industrial development, Yu said.
In the first quarter, the operating income of industrial enterprises above designated size rose by 3.4 percent year-on-year, with the growth rate accelerating by 0.6 percentage points compared to the first two months. In March, revenue growth reached 4.2 percent, 1.4 percentage points higher than in the first two months, according to the NBS.
Nearly 60 percent of sectors have achieved profit increase during this period. Among the 41 major industrial sectors, 24 industries experienced year-on-year profit growth, and 24 industries saw an acceleration in profit growth, a narrowing of decline, or a shift from loss to profit. The manufacturing sector, in particular, saw its profit grow by 7.6 percent in the first quarter.
The equipment manufacturing industry became as a key profit driver in the first quarter, seeing a growth of 6.4 percent year-on-year, 1.0 percentage point faster than in the January-February period. It contributed to overall industrial profit growth by 2.0 percentage points, up 0.6 percentage points from January to February, according to the NBS.
High-tech manufacturing also spearheaded industrial quality growth, reversing a 5.8 percent decline in January-February to post 3.5 percent profit growth in Q1, 2.7 percentage points above the overall average, according to the NBS. In March, it surged 14.3 percent, contributing 2.8 percentage points to monthly industrial profit growth.
Aerospace manufacturing profits rose 23.9 percent, while AI-related sectors, including smart consumer devices, specialized equipment for the electronics industry, and electronic devices and medical devices also posted strong gains, the NBS said.
Moreover, China’s equipment renewal and consumer goods trade-in policies have significantly boosted industrial profits in the first quarter, according to the NBS.
Large-scale equipment renewal policies spurred 14.2 percent and 9.5 percent year-on-year profit growth in the special and general equipment sectors. Meanwhile, the expanded consumer goods trade-in policy drove 78.8 percent profit growth in wearable devices, 65.8 percent in scooters, and 21.7 percent in kitchen appliances.
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