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China’s industrial sector experienced a significant profit increase of over 15 percent in the first two months of this year, thanks to more proactive and effective macroeconomic measures. Profits for industrial companies with annual revenues of at least CNY20 million (approximately USD2.9 million) rose 15.2 percent to CNY1 trillion (around USD144.6 billion) during this period compared to the previous year. This marks a shift from a slight 0.6 percent growth in 2025 and a 0.3 percent decline the year before.
Between January and February, profits of state-owned enterprises increased by 5.3 percent compared to the same period last year, reversing a 3.9 percent decline experienced in 2025. Private firms, on the other hand, saw their profits surge by 37.2 percent, whereas they posted flat growth last year.
Out of 41 major industrial categories, 24 reported year-on-year profit growth in the first two months. Twenty-six sectors experienced rebounds in profitability, either through faster profit growth, narrowed losses, or shifts from loss to profit.
The high-tech manufacturing sector remained the primary growth driver, with profits soaring nearly 59 percent in January and February from the same period last year. In comparison, the overall annual increase last year was just over 13 percent. This sector contributed 7.9 percentage points to the total profit growth of large industrial firms, up from 2.4 percentage points in 2025.
Driven by factors such as increased production and a rebound in product prices, the operating income of large industrial enterprises grew 5.3 percent from a year earlier, accelerating from a 1.1 percent increase last year.
Despite the rapid growth in industrial profits during the first two months, experts warn of rising external risks, notably the spillover effects stemming from geopolitical conflicts. Additionally, the recovery across different industries remains uneven, adding further uncertainty.
Looking ahead, it is crucial to continue implementing policies outlined at the Central Economic Work Conference. Strategies should focus on sustaining domestic demand, optimizing supply chains, and fostering new, high-quality productive forces tailored to local conditions. Furthermore, efforts should be intensified to build a unified national market, supporting China’s industrial economy to develop steadily and healthily.
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