Employees of a metal materials company in Luoshe town, Huzhou, East China's Zhejiang Province weld a steel structure on January 20, 2022. As the Spring Festival approaches, companies in the town's industrial park are ramping up coronavirus containment while operating in full swing to ensure the completion of orders. Photo: cnsphoto

Profits of China's major industrial enterprises achieved faster growth in 2021, boosted by the high-tech manufacturing industry, as the economy continued to recover steadily due to the government's efforts to stimulate the vitality of industrial enterprises and promote high-quality development, an official from the National Bureau of Statistics (NBS) said on Thursday.

However, despite the rapid growth on an annual basis, a significant slowdown in profit growth at the end of the year also highlighted growing downward pressure on industrial firms, underscoring the need for continued policy supports, officials and experts noted.  

In 2021, total profits of China's industrial enterprises above a designated size hit 8.7 trillion yuan ($1.37 trillion), an increase of 34.3 percent over the previous year and 39.8 percent compared with the pre-epidemic level in 2019, according to data released by the NBS on Thursday.

Tian Yun, a Beijing-based economist, attributed the high growth to the upgrading and transformation of China's industrial firms. "Increased exports of high-value-added products such as liquid crystal display panels and chips contributed to the country's industrial profits," Tian told the Global Times on Thursday.

Official data showed that in 2021, the operating revenue of industrial enterprises above the designated size stood at 127.92 trillion yuan, a year-on-year increase of 19.4 percent.

Among 41 major sectors, 32 saw profit growth. The profits across six industries, including mining, more than doubled, and 18 industries such as equipment manufacturing and consumer goods manufacturing achieved double-digit growth in profits, said Zhu Hong, a senior statistician from the NBS.

Zhu noted that the high-tech manufacturing industry boosted China's overall industrial profits. In 2021, high-tech manufacturing profits increased by 48.4 percent over the previous year, with the growth rate higher than the average level of the country's industrial enterprises.

Specifically, profits of pharmaceutical companies and electronics and communications equipment makers grew strongly, up 77.9 percent and 44 percent, respectively, contributing to the growth of high-tech manufacturing profits. Aerospace equipment manufacturing firms' profits rose faster, increasing 76.2 percent, according to the NBS.

An employee from a Shenzhen-based high-tech medical equipment company surnamed Shen told the Global Times on Thursday that despite supply chain disruptions and a shortage of chips, the company's revenue in 2021 maintained strong growth momentum due to China's effective measures for epidemic prevention and control, which provided a stable environment for the firm's development.

In 2021, driven by rising commodity prices, the profits of companies engaged in mining and raw materials manufacturing saw accelerated growth rates of 190.7 percent and 70.8 percent, respectively, over the previous year. 

Within this category, coal and crude oil prices rose significantly during the year, boosting the profit growth of coal, oil and gas extraction industries with year-on-year increases of 212.7 percent and 584.7 percent, respectively.

Zhu noted that despite the rapid growth of industrial profits in 2021, in November and December profit growth fell significantly, and some industries, especially small and micro-sized enterprises, were facing pressure. 

Official data showed that in December, China's industrial profits rose 4.2 percent year-on-year, the slowest rate since April 2020, a decline of 4.8 percentage points compared with the growth rate in November.

"The profit growth of China's industrial enterprises will decline to around 10 percent this year," Tian predicted. 

In 2022, China will continue to improve the core competitiveness of its manufacturing sector, supporting the development of the real economy with policies such as cutting taxes and fees as well as ensuring price stability, in a bid to promote the smooth operation of manufacturing enterprises, Zhu said.