(Yicai) March 27 -- China’s industrial profits fell at a slower pace in the first two months of this year, supported by sustained policy measures and product upgrade subsidies.

From January to February, large industrial enterprises reported total profits of CNY911 billion (USD125.4 billion), a 0.3 percent year-over-year dip, the National Bureau of Statistics announced today. In comparison, they fell 3.3 percent last year, for the third year in a row.

In particular, manufacturers logged a 4.8 percent increase to CNY639.5 billion (USD88.1 billion), driving growth in overall industrial profits by 3.2 percentage points, according to the data.

Profits at state-owned enterprises rose 2.1 percent after dropping 4.6 percent in 2024, while private sector earnings tumbled 9 percent, versus a 0.5 percent increase last year.

China bundles together the economic data for the first two months of each year to iron out the effects of the Chinese New Year holiday, which falls at a different time each year.

Industrial profits are expected to grow moderately this year, held down by weak confidence among private companies and real estate developers along with external factors such as US import tariffs, Wu Chaoming, chief economist at Chasing Financial Holdings, told Yicai.

New equipment renewal policies boosted profits in the general equipment and special equipment sectors, with gains of 6 percent and 5.9 percent, respectively, said Yu Weining, an NBS statistician. 

Some sub-sectors saw even higher growth. Profits at businesses in general-purpose components, mining and metallurgy equipment, and medical devices, surged by 19 percent, 14 percent, and 11 percent, respectively.

Yu added that expanded subsidies for the consumer goods trade-in program drove a more than twofold profit increase at smart consumer device makers. Manufacturers of kitchen appliances and refrigerators posted gains of 20 percent and 19 percent, respectively, while automotive industry earnings rose by 12 percent.

Editors: Dou Shicong, Emmi Laine