China’s large industrial enterprises posted modest but accelerating growth in April, despite an unprecedented trade war with the United States that drove up tariffs on both sides and intensified economic uncertainty.
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Industrial profits among larger firms, with an annual income of 20 million yuan ($US2.78 million) or above generated from their main businesses, recorded a 3 per cent year-on-year increase last month, the National Bureau of Statistics (NBS) announced on Tuesday, up from 2.6 per cent year-on-year growth in March.
For the first four months of the year, industrial profits recorded 1.4 per cent growth – with private enterprises posting the highest growth rate while profits for state-owned enterprises declined.
Zhang Zhiwei, president of Pinpoint Asset Management, said it was the second consecutive month that industrial profits grew and that the trend aligned with other data points for April such as China’s improved export figures.
Industrial profit growth would likely remain positive through the first half of the year but the picture for the second half was blurred, he added.
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“The uncertainty is very high because the trade relationship between China and the US is not very clear.”
The April data was the first indicator of the health of China’s industrial profits since its escalating tariff war with the US – before the two countries agreed to a 90-day trade truce on May 14.