China: Industrial Profits Rise

After recording an alarming 2.3% decline in 2023, profits of industrial companies started to rise again, reaching 914 billion yuan (about 126.5 billion US dollars). China’s National Bureau of Statistics (NBS) emphasized that profits of industrial enterprises increased by 10.2% in January-February. This figure “applies to enterprises with annual core business revenues of $2.8 million or more.”

According to Chinese and international analysts, this growth may indicate a long-awaited recovery of China’s industrial sector, which has been facing difficulties since the covid pandemic. “In the first two months of the year,” NBS writes, “state-owned companies’ revenues increased by 0.5%. The share of foreign companies present in China increased by 31.2%, while the share of private companies increased by 12.7%.

Lynn Song, chief economist at ING, a Dutch multinational financial services company, told Bloomberg, “If the recovery of the manufacturing sector continues in the coming months, it will contribute to the growth target set by the Chinese government for 2024 with a share of around 5%.” According to Lynn Song, stable and continued growth requires “more favorable politics,” which Beijing has already promised.

China will continue to open up to the world and create “better conditions” for foreign companies to have a presence in the country. As Chinese Vice President Han Zheng said at the Invest China international conference, “to invest in China is to invest in the future.” According to Han, Beijing wants to build a global and open economy that desires to share its development opportunities with foreign companies. Han emphasized that Chinese authorities will “ensure safe, stable, high-quality, and efficient supply chain support for the operation of the global economy.”