China records an increase in industrial profits despite trade challenges and contraction pressures.

Data released by the National Bureau of Statistics in China today, Tuesday, May 27, showed growth in industrial companies' profits during the month of April, reflecting the resilience of the Chinese economy amid trade tensions with the United States and domestic economic pressures.

Industrial companies in China recorded a 1.4% annual growth in profits from January to April, reaching 2.1 trillion yuan ($292.28 billion), after a cumulative increase of 0.8% in the first quarter of the year. On a monthly basis, profits in April rose by 3.0% compared to a 2.6% increase in March.

This improvement comes despite the continued contraction in factory prices for the thirty-first consecutive month, with the largest decline in six months in April, raising concerns about the impact of the contraction on companies' profit margins.

China is also facing pressure due to mutual tariffs with the United States, as restrictions on imports threaten to hinder the economic recovery heavily reliant on exports.

Analysts have warned that a 50% decline in exports to the United States could lead to the loss of 16 million jobs, especially if the trade "truce" between the two countries this month does not turn into a permanent agreement.

The data also revealed disparities in sector performance, with profits of state-owned companies falling by 4.4% in the first four months of the year, while private sector profits increased by 4.3% and foreign companies by 2.5%.

In an attempt to boost economic activity, the Chinese leadership urged officials to enhance investor and consumer confidence amid a fragile recovery. Beijing announced in early May a stimulus package including interest rate cuts and injecting substantial liquidity into the markets.

It is worth noting that industrial profit data includes companies with annual revenues of 20 million yuan or more from their main activities.