Workers complete assembling an electric vehicle (EV) at China's EV start-up Leapmotor in Jinhua, East China's Zhejiang Province on April 1, 2024. Photo: VCG

Profits of China's major industrial firms increased 4.3 percent year-on-year in the first quarter of 2024, reversing a 2.3-percent decline registered in 2023, as market demand sustained recovery trend amid intensifying macro-policies, official data showed on Saturday.

Industrial firms with an annual main business revenue of at least 20 million yuan ($2.82 million) saw their combined profits reach 1.51 trillion yuan during the first three months, up 4.3 percent year-on-year, data released by the National Bureau of Statistics showed.

Over the same period, state-owned holding enterprises saw a total profit of 573.82 billion yuan, a year-on-year decrease of 2.6 percent, while private enterprises realized a total profit of 368 billion yuan, up 5.8 percent. Foreign and Hong Kong, Macao and Taiwan-funded enterprises realized a total profit of 373.75 billion yuan, up 18.1 percent, the data showed.

On a quarterly basis, the profits of China's major industrial firms posted growth for the third quarter in the first three months of the year, extending a recovery trend, said Yu Weining, an NBS statistician.

"The gradual recovery of market demand and rapid development of new growth drivers further drive the recovery of corporate revenues," Yu said. 

According to the NBS, the revenue of major industrial firms in China grew by 2.3 percent year-on-year in the first quarter, 1.2 percentage points higher than the growth rate recorded last year, creating favorable conditions for the sustained recovery of corporate profits.

Thanks to the development of new quality productive forces, high-tech manufacturing companies reported rapid profit growth over the period, Yu said. NBS data showed that the profits of the high-tech manufacturing sector jumped by 29.1 percent year-on-year between January and March, compared with a decline of 8.3 percent year-on-year seen last year. It's worth noting that profits in the communication equipment industry surged 3.47-fold in the first three months.

Profits of the equipment manufacturing industry saw notable growth over the period, as new industrialization continues to be boosted, Yu said, noting that the profits of the industry rose by 18 percent year-on-year in the first quarter, serving as a ballast stone.
Specifically, the profits of the electronic industry surged by 82.5 percent year-on-year and that of the automobile manufacturing industry rose by 32 percent, becoming the two manufacturing industries that contributed to the most to profits of China's major industrial firms, according to the NBS.

Chinese enterprises' measures to reduce costs and increase efficiency, along with the macro-policies to stabilize economic growth, have effectively revived the expectations of market entities and will continue to boost their profits growth for the rest of 2024, Chen Fengying, an economist and former director of the Institute of World Economic Studies at the China Institutes of Contemporary International Relations, told the Global Times on Saturday.

Currently, the A-share market is increasingly becoming stabilized, which will give a boost to enterprises' direct financing. In addition, the development of new quality productive forces and emerging industries will facilitate the transformation and upgrade of traditional industries, Chen said, noting that new growth drivers will play a larger role in facilitating the industrial economy.

Chen expressed full confidence in China's ability to reach the pre-set annual GDP target of around 5 percent this year, following the release of better-than-expected first-quarter GDP growth rate of 5.3 percent year-on-year.

By now, the authorities have announced multiple supportive policies, including an action plan to foster large-scale equipment renewable and trading-in of consumer goods. The key is to implement those policies and measures accurately, conduct in-depth reforms in key areas and industries, and improve the business environment, so as to lay a solid foundation for reaching this year's development goals, Chen said.