In the first quarter, profits in China’s industrial sector indicated signs of revival, according to the latest government data released on Sunday. However, the persistent trade war with the United States casts a gloomy shadow, conceivably dampening this promising trend.
With the looming threat of severe tariffs from Washington poised to impact China’s vital export sector and no clear plans for bilateral trade discussions, investors and economists alike are closely observing if the Chinese authorities will introduce further supporting measures, seeking to mitigate economic impacts on the globe’s second largest economic powerhouse.
Official data from the National Bureau of Statistics unveils that China’s industrial profits, when combined, saw a modest growth of 0.8 percent, amounting to 1.5 trillion yuan (equivalent to US$206 billion). This growth occurred in the first quarter, marking a shift from the earlier 0.3 percent decrease that was recorded in the first duo of months.
March’s stand-alone data exhibits an uplift as well, demonstrating a rise in profits by 2.6 percent as compared to the previous year. This financial revival signifies a potentially encouraging trend for the national industrial sector.
In the initial quarter, China posted a robust economic growth which was more substantial than what analysts had predicted. Governmental policies aimed at stimulating the economy has proven fruitful, with consumer spending on the rise and investment receiving a boost.
In spite of the positive upturn, signs of continuing deflationary pressures were still evident. This economic pressure has eaten into the profits of corporations and earnings of workers, as businesses grapple with the increasing disruptions in trading caused by geopolitical tensions.