2018.05.2719:08:00UTC+00China Industrial Profit Growth Bounced Back in April

Profits earned by Chinese industrial companies in April increased at their quickest rate in six months, data from the National Bureau of Statistics (NBS) showed, as factories benefited from higher prices and solid demand.

Profits in April were up 21.9 percent year-on-year to 576 billion yuan ($90.14 billion), the fastest pace since October, bringing gains for the first four months of 2018 to 15 percent. The data suggests that China's industrial sector continues to see solid growth momentum despite clampdowns on pollution and rocky trade relations with the United States.

Last month's rebound was supported by lower comparison figures for April 2017, higher factory prices and stronger demand, He Ping, head of NBS' industrial division, said.

April's rebound was driven by the steel, chemicals and automobile industries, said He, as profits for iron and steel processing firms increased 260 percent in April. No industrial sectors recorded year-on-year losses over January to April, the data showed.

The higher April data should help ease concerns of slowing momentum in China's economy as the country implements tougher pollution controls on “smokestack” industries and cash-strapped regional governments cut back on big investment projects, curbing demand for building materials.

Profit growth for Chinese industrial companies has weakened from the previous year's solid pace as factory gate price gains softened. In the first four months of 2017, profits were up 24.4 percent.

China's producer price inflation accelerated to 3.4 percent in April from March but was much lower than 6.4 percent in the year-ago period.

Profits at China's state-owned firms increased 26.2 percent to 627 billion yuan for Jan-April, compared with a 23.1 percent rise in the first quarter.

The data includes companies with annual revenues of more than 20 million yuan ($3.13 million) from their main operations.