China’s industrial profits posted smaller gains for the first quarter compared with the first two months, official data showed on Saturday (Apr 27), adding to evidence of an uneven recovery for the world’s second-biggest economy.

Profits at China’s industrial firms rose 4.3 per cent in the first quarter from a year earlier, National Bureau of Statistics (NBS) data showed, slower than a 10.2 per cent rise in the first two months.

Profits fell 3.5 per cent year on year in March. NBS did not break down monthly numbers for January to February, but had said at the time that monthly numbers have extended gains since August 2023.

The reading complemented a slew of economic indicators for March such as retail sales and industrial output that pointed to frail domestic demand despite solid first-quarter gross domestic product growth.

Signs of the economy gaining momentum in the opening months were shown to have gradually given way to concerns over lacklustre demand at home.

Last week, senior officials at China’s central bank signalled caution over the boost to credit as real credit demand weakens.

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Earlier in April, Chinese electric vehicle battery company CATL saw its profit swing back to growth in the first quarter, but its revenue slid for the second consecutive quarter amid slowing demand and intensified competition.

Fitch has cut its outlook on China’s sovereign credit rating to negative, citing risks to public finances as the economy faces increasing uncertainty in its shift to new growth models.

Industrial profit numbers cover firms with annual revenue of at least 20 million yuan (S$3.8 million) from their main operations. REUTERS