China’s industrial profits picked up pace in April, official data showed on Tuesday, signaling economic resilience in the face of trade tensions with the United States and lingering deflationary pressures at home.
The world’s two largest economies traded tit-for-tat tariffs last month, after US President Donald Trump announced sweeping “reciprocal tariffs” on April 2, then pausing them for most countries while singling out China for levies of 145%.
The import curbs risk derailing China’s largely export-led economic recovery, with analysts warning that up to 16 million jobs could be lost if exports to the United States fall by 50% and the truce Beijing and Washington struck earlier this month cannot be converted into a lasting arrangement.
Industrial profits rose 1.4% year-on-year in the January-April period to 2.1 trillion yuan ($292.28 billion), according to data from the National Bureau of Statistics (NBS), following a cumulative 0.8% increase in the first quarter that had reversed a 0.3% drop over the first two months.
In April alone, profits rose 3.0%, versus a 2.6% rise in March.
A spate of economic indicators released this month painted a mixed picture for China, with better-than-expected exports offset by slowing growth in factory output and retail sales.
Meanwhile, factory-gate prices contracted for a 31st straight month and marked their steepest drop in six months in April, further fueling fears of deflation and squeezing companies’ profit margin.
China’s leadership has repeatedly urged officials to take steps to lift business and household confidence for investment and spending as the country navigates a fragile economic recovery.
In early May, Beijing announced a broad stimulus plan in its latest push to revive growth with interest rate cuts and a major liquidity injection.
Also over the past few months, Chinese policymakers and big e-commerce platforms pledged support for tariff-hit exporters to expand domestically.
Profits at state-owned firms were down 4.4% in the first four months. Private-sector companies saw a 4.3% gain and foreign firms posted a 2.5% increase, according to a breakdown of the NBS data.
Industrial profit numbers cover firms with annual revenue of at least 20 million yuan from their main operations.
