In an interview on October 27, Wang Enbo from China News Service discussed recent developments in China’s industrial sector. Despite a variety of challenges, the profits of large-scale industrial enterprises in China fell by 3.5% year-on-year during the first nine months of this year, totaling over 5 trillion yuan. Notably, sectors driven by high-tech manufacturing exhibited rapid profit growth.
According to the National Bureau of Statistics of China, the total profits of industrial enterprises amounted to 52,281.6 billion yuan from January to September, reflecting an increase of 5,754.3 billion yuan from the previous two-month period. However, factors such as insufficient effective demand, declining prices of industrial products, and significantly elevated comparison bases since August have contributed to the year-on-year profit decline.
Yu Weining, a statistician from the Industrial Department at the National Bureau of Statistics, noted that the producer price index for industrial goods continued to decline in September, which has put considerable pressure on company revenues and earnings. Meanwhile, the operating income of large-scale industrial enterprises managed to grow by 2.1% over the same period, although this represents a 0.3 percentage point decrease compared to earlier months. Furthermore, the increase in corporate costs outpaced revenue growth, leading to a reduction in gross profit and insufficient support for profit expansion. The raised comparison base since August also creates pressure on profit recovery.
Amid these challenges, high-tech manufacturing has played a crucial role in supporting industrial profits. From January to September, thanks to rapid production growth, profits in the high-tech manufacturing sector rose by 6.3%, outpacing the average growth of large-scale industrial enterprises by 9.8 percentage points and contributing 1.1 percentage points to the overall profit growth. Specifically, profits in smart vehicle equipment manufacturing, wearable smart devices, and intelligent unmanned aerial vehicles increased by 27.5%, 25.6%, and 10.2%, respectively. Additionally, the green manufacturing sector, including lithium-ion battery production, saw a remarkable profit growth of 58.8%.
The consumer goods sector also experienced stable profit growth, with profits in the manufacturing of consumer goods rising by 2.4% compared to last year, surpassing the average growth rate in large-scale industries by 5.9 percentage points. Industries such as textiles, furniture, agricultural products, and cultural and educational goods have shown promising profit trends.
In summary, despite the overall decline in profits for large-scale industrial enterprises, Yu Weining emphasized the resilience of new industrial momentum, noting that as corporate expectations stabilize and confidence increases, there is optimism for a recovery in industrial profitability.
