China’s first-quarter industrial profits return to growth amid tariff woes

China’s first-quarter industrial profits return to growth amid tariff woes


Profits at China’s industrial firms grew at a faster pace in October, the statistics bureau said on Nov. 27, 2021, providing a buffer for a faltering economy battered by soaring raw material prices. Pictured here is a worker counting cast steel pipes to be shipped aboard at Lianyungang Port in Lianyungang, Jiangsu province of China.

Wang Chun | Visual China Group | Getty Images

China’s industrial profits returned to growth in the first quarter, official data showed on Sunday, but are likely to come under further pressure amid a trade war with the United States.

With Washington’s aggressive tariffs threatening to hit China’s crucial export engine hit and no time frame yet for any bilateral trade talks, economists and investors are waiting for the Chinese government to roll out more support measures to cushion the blow to the world’s second-largest economy.

Cumulative profits of China’s industrial firms rose 0.8% to 1.5 trillion yuan ($205.86 billion) in the first quarter from a year earlier, the National Bureau of Statistics (NBS) data showed, reversing a 0.3% decline in the first two months.

In March alone, profits rose 2.6% on-year.

The profit gain in the first quarter followed a 3.3% fall in 2024, reversing the trend of continuous declines in cumulative profits of enterprises since the third quarter of last year, Yu Weining, an NBS statistician, said in a separate statement along with the data release.

Thanks to a consumer goods trade-in campaign, profits in the wearable smart device manufacturing sector soared by 78.8% while those for household kitchen appliance makers rose 21.7%, said the statement.

China reported stronger-than-expected economic growth in the first quarter as government stimulus boosted consumption and supported investment, but deflationary pressures persisted, ripping into corporate profits and workers’ incomes as firms tried to navigate rising trade disruptions.

“At the current stage, the external environment is becoming more complex and severe, and unstable and uncertain factors are increasing,” said Yu, adding the government will further strengthen policy implementation and promote the continuous improvement of corporate profitability.

Beijing has made increasingly louder calls on exporters to find local buyers as an alternative to the U.S. market, now effectively frozen after Washington hiked tariffs on Chinese goods by 145%, but many export-reliant factories have decried weak domestic demand, price wars, low profits and payment delays in the Chinese market.

The ruling Communist Party’s Politburo on Friday pledged to support firms and workers most affected by the impact of U.S. tariffs, also saying new monetary tools and policy financing instruments will be set up to boost innovation, consumption and foreign trade.

Profits at state-owned firms dipped 1.4% in the first quarter. Private-sector companies saw a 0.3% fall, but foreign firms recorded a 2.8% gain, according to a breakdown of the NBS data.

Industrial profit numbers cover firms with annual revenue of at least 20 million yuan from their main operations.



Source

Singapore negotiating for U.S. concessions on pharmaceuticals, chips
World

Singapore negotiating for U.S. concessions on pharmaceuticals, chips

Gan Kim Yong, Singapore’s deputy prime minister, during a panel session, at the World Economic Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 21, 2025. Stefan Wermuth | Bloomberg | Getty Images Singapore is negotiating concessions for pharmaceutical exports to the U.S. while ensuring it still has access to high-end AI chips from the American market, said Trade and Deputy Prime […]

Read More
Chinese factories are stopping production and looking for new markets as U.S. tariffs bite
World

Chinese factories are stopping production and looking for new markets as U.S. tariffs bite

Textile manufacturing workers in Binzhou, Shandong, China, on April 23, 2025. Nurphoto | Nurphoto | Getty Images BEIJING — Chinese manufacturers are pausing production and turning to new markets as the impact of U.S. tariffs sets in, according to companies and analysts. The lost orders are also hitting jobs. “I know several factories that have […]

Read More
CNBC Daily Open: Trump’s ‘America First’ might leave the U.S. behind
World

CNBC Daily Open: Trump’s ‘America First’ might leave the U.S. behind

A Southwest Airlines Boeing 737 departs from San Diego International Airport with an American flag in the foreground on April 20, 2025 in San Diego, California, U.S. Kevin Carter | Getty Images News | Getty Images U.S. President Donald Trump’s “America First” ideology, which, generally speaking, prioritizes the domestic over the international, rests on the […]

Read More