China’s industrial profits increased in April, rising by 3.0% YoY versus the 2.6% rise in March. Industrial profits rose 1.4% YoY in January-April to 2.1 trillion yuan ($292.28 billion), following a cumulative 0.8% increase in the first quarter that reversed a 0.3% drop over the first two months.

The data from China’s National Bureau of Statistics released Tuesday also revealed that industrial profits in April rose 0.4 percentage points faster than in March. New driving force sectors like equipment and high-tech manufacturing saw rapid profit growth.

From January to April, high-tech manufacturing profits increased by 9.0% year-on-year, 5.5 percentage points faster than in the first three months of the year and 7.6 percentage points above the average of all industries.

The world’s two largest economies traded tit-for-tat tariffs last month after U.S. President Donald Trump announced sweeping reciprocal tariffs on April 2, then paused them for most countries while singling out China for levies of 145%. China’s growing industrial profits signaled economic resilience in the face of trade tensions with the U.S. and lingering domestic deflationary pressures.

Beijing’s industrial profit surges despite declining export activity 

🇨🇳 China's industrial profits in the four months rose by 1.4% over the same period lat year, improving from 0.8% in the first three months. On a year-over-year basis, industrial profits rose by 3%. pic.twitter.com/XYPVJ5GcjE

— Augur Infinity (@AugurInfinity) May 27, 2025

China’s industrial profits rose for a second straight month in April despite manufacturing activity falling more than expected to a 16-month low in the same month. However, manufacturing firms recorded a profit increase of 8.6% in January-April, while mining profits plunged 26.8%, but utilities posted a modest 4.4% gain, based on NBS data. Cumulative profits at major industrial firms notably climbed in April after returning to growth in Q1 of 2025, rising 0.8% YoY and reversing the trend of declines since Q3 of 2024. 

Chinese officials said the strong profit jump was largely due to two major policies enacted by Beijing since late 2024, chiefly increased subsidies and trade-ins of consumer goods and increased large-scale equipment renewal for Chinese businesses.

“China’s exports and industrial production defied expectations, posting strong growth for the month.”

–Ajay Bagga, former Executive Chairman at OPC Asset Solutions

However, Chinese exports to the U.S. plunged over 21% from a year earlier as the triple-digit tariffs kicked in, while overall exports surged 8.1% on the back of a jump in shipments to Southeast Asian nations. Retail sales growth also slowed to 5.1% from a year earlier, while industrial output expanded 6.1% on year, emphasizing the persisting supply-demand imbalance in the economy.

China pledges support for tariff-hit exporters to expand domestically

Earlier this month, China announced a broad stimulus plan in its latest push to revive growth with interest rate cuts and a major liquidity injection. The country’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. Also, over the past few months, Chinese policymakers and big e-commerce platforms pledged support for tariff-hit exporters to expand domestically.

However, import curbs risk derailing China’s largely export-led economic recovery, with analysts reportedly warning that up to 16 million jobs could be lost if exports to the U.S fell by 50% and the truce Beijing and Washington struck earlier this month could not be converted into a lasting arrangement.

Meanwhile, a breakdown of the NBS data revealed that profits at state-owned firms were down 4.4% in the first four months, while private-sector companies saw a 4.3% gain and foreign firms posted a 2.5% increase. Stronger earnings could reduce the need for further stimulus, offering the government greater flexibility as it targets around 5% GDP growth in 2025.

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