Electronics, raw materials boost industrial profits in first 5 months

Profits at China's major industrial firms sustained strong growth momentum in the first five months of the year, buoyed by rapid profit gains in the electronics sector, official data showed on Saturday.

Industrial enterprises with annual main business revenue of at least 20 million yuan ($2.93 million) reported total profits of 3.14 trillion yuan, up 18.8 percent year-on-year, with the growth rate accelerating by 0.6 percentage point from the January-April period, data from the National Bureau of Statistics showed.

The solid growth was underpinned by a sharp increase in profits in the electronics manufacturing sector, said Yu Weining, a statistician at the bureau.

Profits in the electronics manufacturing sector surged 103.9 percent year-on-year in the January-May period, contributing 43.1 percent to overall profit growth among major industrial firms, according to the NBS.

"The rapid advance of artificial intelligence worldwide has spurred a surge in demand for advanced computing and memory chips, providing a strong boost to profit growth in the electronics sector," Yu added.

The raw materials manufacturing sector also reported strong growth, with profits rising 83.1 percent year-on-year in the first five months and contributing 10.2 percentage points to overall profit growth.

"Profits at major industrial firms have continued to post solid gains since the beginning of the year," Yu said, adding that the recovery remained under pressure from weak domestic demand relative to supply, with some firms continuing to face difficulties in production and operations.

Looking ahead, Yu called for stronger counter-cyclical and cross-cyclical policy support, further steps to boost domestic demand and improve supply, and faster efforts to foster new growth drivers.