China's Major Industrial Firms' Profits Rise 18.8% in January-May, NBS Data Show

Profits of China's major industrial firms rose 18.8% year on year in the January-May period, accelerating from an 18.2% increase in the first four months, according to RTHK, citing National Bureau of Statistics data released on Saturday. Industrial firms with annual main business revenue of at least 20 million yuan posted combined profits of 3.14 trillion yuan. For May alone, profits rose 21.1% from a year earlier. ANZ senior China strategist Xing Zhaopeng said upstream sectors and the computer industry saw sharp gains while downstream manufacturing remained under pressure, adding that producer price improvements appeared to be the main driver of profit growth. Profits at manufacturers of computers, communication and electronic equipment surged 103.9% in the first five months, accounting for 43.1% of overall profit growth, supported by a global AI investment boom. Profit in non-ferrous metal ore mining and processing rose 93.9%. By contrast, automakers' profits fell 19.8% despite strong exports, while furniture makers' profits dropped 58.4%. Economist Intelligence Unit senior economist Xu Tianchen said the divergence underscores the importance of de-escalation of the Iran conflict, adding that a resumption of shipping through the Strait of Hormuz and lower international oil prices could support a gradual recovery in downstream profits. Analysts also expect policymakers to increase targeted support to stabilise corporate profitability as consolidation accelerates in sectors facing overcapacity and intense competition.