Industry PMI Photo:VCG

In April, China's industrial enterprises above the designated size saw profits increase by 4.0 percent year-on-year, a significant improvement from the 3.5 percent decline in March as the government’s pro-growth policies take effect and market demand picks up, China’s National Bureau of Statistics (NBS) said on Monday. 

Industrial profits of companies above the designated size rose 4.3 percent in first fourth months this year, unchanged from the first quarter, maintaining the steady growth, the NBS said.

"As market demand continues to recover, growth in industrial production is accelerating, factory gate price drops are narrowing, and the level of production and sales coordination is improving. These factors are driving the improvement of enterprises’ revenues," said Yu Weining, a statistician from the NBS, in a note on Monday.

In April, the operating income of industrial enterprises increased by 3.3 percent year-on-year, a significant turnaround from the 1.2 percent drop in March, Yu said.

In the period from January to April, over 70 percent of all industries experienced an increase in profits compared to the same period last year.

As large-scale equipment renewal policies and the cultivation of new quality productive forces take effect and gain pace, the equipment manufacturing has played a key role in driving the growth, with profits increasing by 16.3 percent, outpacing the overall industrial sector by 12 percentage points.

The electronics industry saw a significant increase in profits of 75.8 percent, driven by demand for products such as smartphones and integrated circuits. The transportation equipment industry and the automotive industry also saw notable profit growth of 40.7 percent and 29.0 percent, respectively.

"In the first four months of the year, profits of large industrial enterprises have stabilized, but it is important to note that domestic effective demand remains insufficient and the external environment remains complex and severe. A broader recovery in industrial enterprise profitability needs to be consolidated," Yu said.

Looking ahead, efforts need to be made in accelerating the development of new quality productive forces, industrial quality upgrading and expanding effective demand, Yu added.