Industrial profit growth rate year-on-year increased to 15.2% in January-February, with high-tech manufacturing performing remarkably well.

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Reporter Xin Yuan

The National Bureau of Statistics announced Friday that data shows that in the first two months of this year, China’s industrial enterprises above designated size achieved total profits of 1,024.56 billion yuan, up 15.2% year over year. The growth rate rebounded by 9.9 percentage points from December last year, accelerating by 14.6 percentage points compared with the whole of last year.

Yu Weining, Chief Statistician of the Industrial Division of the National Bureau of Statistics, interpreted in a press release that, overall, profits of industrial enterprises above designated size are growing at a relatively fast pace. However, the international environment has been marked by ups and downs; risks from outside, especially the spillover risk from geopolitical conflicts, are rising. There are many factors that are unstable and uncertain. At the same time, the recovery of industry and enterprise profits during China’s domestic economic transformation remains uneven. Next, efforts should continue to expand domestic demand, optimize supply, develop new productive forces in light of local conditions, deepen the building of a nationwide unified large market, and promote the sustained and sound healthy development of industrial economic activity.

At the industry level, most industries saw profit growth, and more than 60% of industries rebounded. According to data from the statistical bureau, in the first two months, among 41 major industrial categories, 24 industries had profits growing year on year, with a growth coverage of 58.5%. The profits of 26 industries grew faster than in the whole of the previous year or saw their declines narrow and shifted from negative to positive growth; the rebound coverage exceeded 60%.

The equipment manufacturing industry’s “stabilizer” role is evident, and the profit structure of industrial enterprises continues to improve. Data show that in the first two months, the operating revenue of equipment manufacturing above designated size rose 8.9% year on year, which is 3.6 percentage points higher than all industrial enterprises above designated size. Rapid growth in operating revenue drove profits of equipment manufacturing above designated size to increase 23.5% year on year, accelerating by 15.8 percentage points compared with the whole of the previous year.

In addition, profits of equipment manufacturing above designated size accounted for 30.4% of total profits of all industrial enterprises above designated size, up 2.0 percentage points year on year. The profit structure continued to improve. From an industry perspective, among the eight industries in equipment manufacturing, profits in five industries rose. In particular, profits in the electronics, railway ships and aerospace, and electrical machinery industries grew relatively quickly, rising by 203.5%, 11.4%, and 6.2% year on year, respectively.

Profits in high-tech manufacturing grew rapidly, strengthening the leading role. Data show that in the first two months, profits of high-tech manufacturing above designated size increased 58.7% year on year, accelerating by 45.4 percentage points compared with the whole of the previous year. It pulled up overall profits of industrial enterprises above designated size by 7.9 percentage points, with the pulling effect stronger by 5.5 percentage points than in the whole of the previous year.

From an industry perspective, in the first two months, the development of intelligent product manufacturing is looking good. Profits in the intelligent unmanned aircraft manufacturing, intelligent in-vehicle equipment manufacturing, and other intelligent consumer equipment manufacturing industries rose by 59.3%, 50.0%, and 31.3% respectively.

The national conference on industrial and information technology work that was held earlier listed “making every effort to consolidate the positive momentum in stabilizing and improving the industrial economy” as the top priority task for 2026.

At the meeting, Li Lecheng, Minister of the Ministry of Industry and Information Technology, said that this year the focus will be on four areas, including stabilizing growth in key industries and key regions; tapping potential to expand effective demand; promoting value creation and winning on quality; and further enhancing the drive, energy, and vitality of operating entities.

Looking ahead to the subsequent trend in industrial profits, Wen Bin, Chief Economist of China Minsheng Bank, told Jiemian News that industrial enterprise profits are expected to continue in a recovery trajectory. On the demand side, domestic consumption is growing steadily, investment is gradually stopping the decline and stabilizing, and exports are expected to see stable volume and improved quality. Overall demand is expected to remain stable with improvement. On the price side, under the effect of the “anti-involution” policy, the rate of decline in prices has narrowed, easing corporate cost pressures and further supporting an improvement in profits.

In addition, Wen Bin said that as the construction of a new type of industrialization and a modern industrial system accelerates, demand for effective investment in manufacturing, equipment upgrades, and technological transformation continues to be released. The operating environment and profit margins of industrial enterprises are expected to gradually improve, helping industrial enterprise profits transition from phased recovery to a more resilient, moderate growth.

The macro research team at Everbright Securities believes that in 2026, with readings for the factory gate price index of industrial products (PPI) rebounding and the policy orientation of “investment stabilizing and recovering from the downturn,” it is expected to support a rebound in corporate profitability.

Specifically, Everbright Securities pointed out that on the price side, against the backdrop of global liquidity easing, as countries rebuild their supply chains and compete more quickly for energy and mineral resources, international prices of bulk commodities may rise. In China, as “anti-involution” policies are further deepened, capacity utilization rates will gradually recover, and industrial product prices will move out of the low end. On the quantity side, considering that various policies to stabilize investment are taking effect and that major projects will be launched in a concentrated manner in the first year of the “15th Five-Year Plan,” expanded investment demand will drive a rebound in industrial production. On the structure side, benefiting from the rebound in PPI readings and investment stabilizing factors, profits in upstream and midstream industries are expected to improve, while downstream industries’ profitability is expected to face pressure due to cost increases.

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