China’s industrial economy has started 2024 on a high note, with manufacturing enterprises above designated size reporting a 7.9% year-on-year increase in profits, totaling 1.017 trillion yuan ($143 billion) in the first quarter. This robust performance reflects a harmonious blend of demand and supply-side factors bolstered by supportive government policies.
On the demand side, China’s economy is experiencing a resurgence in investment and consumption. Excluding the real estate sector, fixed asset investment surged by 9.3% year-on-year in Q1 2024, signaling renewed efforts in industrial upgrading. High-tech sectors such as aerospace, equipment manufacturing, and computer manufacturing witnessed double-digit growth, indicating strong momentum in innovation-driven industries.
Consumer spending has also rebounded, with total retail sales up by 4.7% year-on-year. The Spring Festival holiday saw a remarkable 47.3% increase in tourist expenditure, highlighting robust household consumption driving industrial activity.
Government policies have played a pivotal role in this upswing. Targeted measures to incentivize consumer spending and capital investment have stimulated both demand and supply. Large-scale initiatives promoting equipment upgrades and the replacement of old consumer goods have boosted investment in industrial machinery while fueling sales of new household products. Additionally, the government’s push for the “Three Major Projects”—affordable housing, urban village renewal, and public infrastructure—has injected substantial stimulus into the construction sector, generating significant demand across industrial supply chains.
On the supply side, enterprises are reaping the benefits of technological upgrades and operational modernization. A prime example is the Xiaomi Automobile Super Factory in Beijing, which began production in March. With a comprehensive automation rate of 91%, over 400 robots, and more than 400 high-precision cameras in its body shop, the factory exemplifies efficient, high-tech manufacturing. This focus on technological advancement aligns with national priorities to enhance new quality productive forces through breakthroughs in core technologies and the integration of cutting-edge innovations in production processes.
The Central Economic Work Conference at the end of 2023 emphasized the urgency of these initiatives, and the results are evident in the robust performance of China’s manufacturing sector. As enterprises continue to modernize and government policies provide favorable conditions, China’s industrial economy appears poised for sustained growth in 2024.
Reference(s):
Profitable start for Chinese manufacturing fueled by policy tailwinds
cgtn.com
