Without market demand, profits would be like water without a source. On the demand side, we must continue to solidly promote large-scale equipment upgrades and consumer goods trade-in programs, encourage the development of artificial intelligence terminals, smart wearables and other new forms of consumption, using market demand upgrades to lead industrial transformation. We should advance the construction of a unified national market in depth, accelerate efforts to clear enterprise payment arrears, and create a favorable market environment for corporate development.
Data released by the National Bureau of Statistics shows that from January to August, profits of industrial enterprises above designated size nationwide increased by 0.9% year-on-year, reversing the continuous decline in cumulative profits that had persisted since May this year. Reasonable profits are the foundation for sustainable corporate development. This positive change indicates that the fundamentals of the industrial economy have been further consolidated and reflects the effectiveness of industrial transformation and upgrading.
Who is driving this "comeback" in industrial enterprise profits?
In the first eight months of this year, cumulative profit growth turned from negative to positive, with particularly strong growth of 20.4% in August. Objectively speaking, the low base effect provided support. In August last year, affected by natural disasters such as high temperatures, heavy rains, and floods, combined with insufficient effective demand, industrial enterprise profits fell 17.8% year-on-year, providing favorable conditions for this year's year-on-year improvement. However, attributing all the credit to "low base effects" would overlook the substantial positive changes occurring in the industrial economy.
More importantly, the driving force comes from the resonance between macroeconomic policies and market forces. Since the beginning of this year, large-scale equipment upgrades and consumer goods trade-in programs have been expanded, and a series of domestic demand expansion policies have been intensively implemented, gradually warming market demand. Meanwhile, efforts to address "involutionary" competition have effectively curbed behaviors such as low-price dumping and vicious price wars, allowing enterprises to maintain reasonable profit margins and allocate more resources to R&D innovation and quality improvement, forming a virtuous cycle of "innovation generates profits, profits fuel further innovation." Encouragingly, from January to August, profits of enterprises of all sizes improved, with private enterprise profit growth accelerating particularly, demonstrating the effective stimulation of market vitality and gradual recovery of corporate confidence under positive macroeconomic policies.
From the perspective of "quantity" and "price" factors, in August, the year-on-year growth rate of industrial value-added above designated size nationwide was 5.2%, down from 5.7% in July. The Producer Price Index (PPI) fell 2.9% year-on-year, with the decline narrowing for the first time since March this year; month-on-month, it ended eight consecutive months of decline, changing from a 0.2% decrease last month to flat. Costs per 100 yuan of operating revenue decreased by 0.20 yuan year-on-year, the first monthly year-on-year decrease since July 2024. It can be seen that the "quantity" growth of industrial production contributed limitedly to profits, with profit improvement relying more on improvements in "price" and "profit margins."
From an industrial structure perspective, the recovery in industrial enterprise profits shows significant characteristics of high-quality development. In the first eight months of this year, profits of equipment manufacturing enterprises above designated size increased 7.2% year-on-year, contributing 2.5 percentage points to the profit growth of all industrial enterprises above designated size. As a representative of technology-intensive industries, equipment manufacturing's profit growth significantly exceeded the industrial average, reflecting value enhancement brought by rapid development in emerging areas such as high-end equipment and intelligent manufacturing. Meanwhile, the deep integration of new-generation information technologies such as artificial intelligence and industrial internet with traditional industries has spawned new economic growth points. Additionally, profits in raw materials manufacturing and consumer goods manufacturing are also improving, reflecting good momentum in coordinated recovery across upstream and downstream industrial chains.
The turn to positive profit growth is a positive signal, but it's only a beginning. Currently, external environmental uncertainties persist, domestic market demand remains insufficient, some industries still face pressures from overcapacity and disordered competition, and many enterprises, especially small and medium-sized ones, still face operational difficulties. Promoting stable and positive industrial enterprise profits requires continued efforts in technological innovation, demand expansion, and environmental optimization.
The root of profits lies in value creation. On the supply side, we must persist in using technological innovation to drive industrial innovation, continuously optimize industrial structure, and enhance industrial chain value levels. We should promote the "AI+" initiative in depth, facilitate the popularization of new models such as intelligent manufacturing and flexible production, and strengthen enterprises' pricing capabilities and cost control abilities. We must continue to implement "anti-involution" policies and promote the formation of a virtuous market mechanism of "high quality, fair price." Recently, a new round of growth stabilization work plans for ten key industries is being intensively implemented, which will help further strengthen the foundation for industrial economic improvement.
Without market demand, profits would be like water without a source. On the demand side, we must continue to solidly promote large-scale equipment upgrades and consumer goods trade-in programs, encourage the development of artificial intelligence terminals, smart wearables and other new forms of consumption, using market demand upgrades to lead industrial transformation. We should advance the construction of a unified national market in depth, accelerate efforts to clear enterprise payment arrears, and create a favorable market environment for corporate development.