BEIJING, March 27 (Xinhua) — Profits of China’s major industrial firms increased 15.2 percent year on year in the first two months of 2026, with emerging sectors such as equipment manufacturing and high-tech manufacturing serving as major growth drivers, official data showed Friday.
Industrial firms with an annual main business revenue of at least 20 million yuan (about 2.9 million U.S. dollars) saw their combined profits hit 1.02 trillion yuan during the January-February period, the National Bureau of Statistics (NBS) said.
From January to February, various regions and departments intensified the implementation of more proactive and effective macro policies, focusing on leveraging the integrated effects of existing and new policies. As a result, profits of major industrial firms accelerated in growth, with most industries seeing a rebound in profits, according to the NBS.
NBS statistician Yu Weining said the 15.2 percent growth rate in the first two months this year accelerated by 14.6 percentage points compared to the full year of 2025.
In January and February, the manufacturing sector grew by 18.9 percent, accelerating by 13.9 percentage points over the previous year; the mining sector grew by 9.9 percent, compared to a decline of 26.2 percent in the previous year; and the generation and supply of power, heat, gas and water increased by 3.7 percent.
From January to February, profits in 24 of the 41 major industrial sectors, or 58.5 percent of them, increased year on year, according to Yu.
The equipment manufacturing sector played a significant stabilizing role, with the profit structure of industrial firms continuing to improve. From January to February, operating revenue of major equipment manufacturing firms increased by 8.9 percent year on year, 3.6 percentage points higher than that of all industrial firms.
Rapid revenue growth drove a 23.5 percent year-on-year rise in profits for equipment manufacturing firms, accelerating by 15.8 percentage points from the previous year.
Profits of major equipment manufacturing firms accounted for 30.4 percent of total profits of major industrial firms, an increase of 2 percentage points year on year, reflecting continued optimization of the profit structure.
Among the eight subsectors of equipment manufacturing, five achieved profit growth, Yu said. Notably, the electronics, railway-ship-aerospace, and electrical machinery industries recorded rapid profit increases, rising by 203.5 percent, 11.4 percent and 6.2 percent respectively year on year.
Profits in the high-tech manufacturing sector grew rapidly, strengthening its leading role, Yu said. From January to February, profits of major high-tech manufacturing firms increased by 58.7 percent year on year, accelerating by 45.4 percentage points from the previous year. This contributed 7.9 percentage points to the profit growth of all industrial firms.
Profits in intelligent unmanned aerial vehicle manufacturing, intelligent in-vehicle device manufacturing, and other intelligent consumer device manufacturing increased by 59.3 percent, 50 percent and 31.3 percent respectively.
The rapid development of the semiconductor industry also drove fast profit growth in related sectors, Yu added.
From January to February, the cost per 100 yuan of operating revenue for major industrial firms was 84.83 yuan, a year-on-year decrease of 0.24 yuan. This marks the first year-on-year decline in cumulative industrial firm costs since 2022.
China’s anti-involution policies aim to tackle excessive market competition and restore corporate profitability, and their positive impacts will become increasingly evident throughout 2026, said Ding Shuang, chief economist of Greater China and North Asia with Standard Chartered.
Market regulatory authorities will continue to strengthen efforts in deepening price supervision and inspection, as well as intensifying the rectification of rat race competition, to better leverage the functions of price governance and competition regulation.
Rat race competition is a concept gaining traction in recent years to describe cutthroat competition, where companies, vying for market share, engage in aggressive price cuts but only get trapped in a cycle of diminishing returns. ■
