China Industrial Profits Soar 15.5% In Jan-March

China’s industrial profits surged 15.5% yoy in Q1 2026, accelerating from a 15.2% gain in the first two months of the year. The solid gain came despite external headwinds from the Middle East conflict, which has heightened uncertainty around global demand and supply chains. State-owned enterprises showed a firmer recovery, with profits up 10.1% to CNY 619.6 billion, after a 5.3% growth in January-February. Private firms remained the key driver, though growth eased to 25.4% from 37.2%, reaching CNY 430.5 billion. Joint-stock companies also stayed resilient, with profits rising 20.9% to CNY 1,305.5 billion. By sector, manufacturing led gains, climbing 19.1% to CNY 1,238.4 billion, followed by mining at 16.2%, while utilities lagged with a 3.2% drop. Among industries, mining support services surged 264.6%, alongside strong gains in non-ferrous metals (116.7%) and electronics manufacturing (124.5%). In March alone, industrial profits rose 15.8% yoy, the fastest in six months.

China’s industrial profits jumped 15.2% yoy in the first two months of 2026, rebounding sharply from 0.6% growth in 2025. It marked the strongest start since 2018, excluding the pandemic spike in 2021, underscoring China's recovery momentum before Middle East conflict-driven oil shocks lifted raw material costs. State-owned enterprises returned to growth, with profits rising 5.3% to CNY 366.6 billion after a 3.9% drop in 2025. Private firms surged 37.2% to CNY 284.4 billion, rebounding from flat results last year. Joint-stock enterprises climbed 22.1% to CNY 803.3 billion, reversing a slight decline. By sector, manufacturing led gains with an 18.9% jump to CNY 732.1 billion, while mining profits rose 9.9% to CNY 155.6 billion. Utilities added 3.7% to CNY 136.8 billion. Among industries, computer, communication, and electronic equipment manufacturing led with 200% profit growth, while non-ferrous metal smelting and rolling soared 150%.

Profits at China’s industrial firms rose 0.6% to CNY 7.40 trillion in 2025, marking the first annual increase since 2021. Foreign-invested enterprises, including those funded by Hong Kong, Macao, and Taiwan, recorded profits of CNY 1.74 trillion, up 4.2% year on year. Private enterprises posted profits of CNY 2.28 trillion, unchanged from the previous year. In contrast, state-owned holding enterprises saw profits fall 3.9% to CNY 2.06 trillion, while joint-stock enterprises reported a slight decline of 0.1%, with total profits reaching CNY 5.54 trillion. By sector, manufacturing profits rose 5.0% to CNY 5.69 trillion, while the electricity, heat, gas, and water production and supply sector saw profits increase 9.4% to CNY 872.12 billion. Meanwhile, profits in the mining industry fell sharply by 26.2% to CNY 834.51 billion.