A worker processes solar cell wafers for export at a photovoltaic (PV) module manufacturing enterprise in Meishan city, Southwest China's Sichuan Province on November 20, 2023. The city has formed a PV industry chain of silicon wafers, batteries and modules. The products are exported to Germany, France and other countries and regions. Photo: VCG

Profits of China's industrial enterprises above designated size fell 4.4 percent during the first 11 months of 2023, maintaining the month-by-month narrowing that began in March. Experts said that the ongoing improvement underscores the resilience of the national economy, and the recovery will continue to accelerate into 2024.

From January to November, the total profits of the industrial enterprises above designated size stood at 6.98 trillion yuan ($977 billion), a year-on-year decrease of 4.4 percent, narrowing by 3.4 percentage points from the first 10 months, the National Bureau of Statistics (NBS) reported on Wednesday.

State-owned enterprises achieved total profits of 2.24 trillion yuan, down 6.2 percent, while private enterprises had total profits of 2 trillion yuan, a 1.6 percent increase, the NBS data showed.

The mining sector's profits fell by 18.3 percent to 1.23 trillion yuan, while the utility sector's profits reached 655.85 billion yuan, up 47.3 percent.

As the effects of macroeconomic policies continue to kick in, domestic demand is gradually recovering, industrial production is seeing an accelerating rebound, and the profitability of industrial enterprises is experiencing sustained improvement, NBS statistician Yu Weining said in a statement.

The decline of profits has continued to narrow since March, and the latest period was the first time this year that the decline was less than 5 percent, Yu said.

In November, profits rebounded rapidly. Profits of industrial enterprises rose by 29.5 percent year-on-year, significantly faster than that in October, growing for the fourth consecutive month, Yu added.

With deepening industrial chain upgrading, the momentum of development in the equipment manufacturing industry is growing, leading to sustained profit growth, the NBS said.

From January to November, profits in the equipment manufacturing industry rose by 2.8 percent year-on-year, accelerating by 1.7 percentage points from the first 10 months. This development contributed to a 0.9 percentage point increase in the total profits of industrial enterprises.

Overall, 80 percent of industries have experienced a rebound in profit growth rates.

The operating income of enterprises rose by 1 percent year-on-year in the first 11 months, accelerating by 0.7 percentage points from the first 10 months.

In November, the figure increased by 6.1 percent year-on-year, up 3.6 percentage points from October. "The continuous uptrend for five consecutive months played a significant role in driving the growth of enterprises' profits," Yu said.

Growing incomes and profits of large-scale industrial enterprises reflected sustained improvement in the overall operating conditions of the industrial sector, Zhou Maohua, a macroeconomic analyst at Everbright Bank, told the Global Times on Wednesday.

This was mainly due to the ongoing recovery of domestic demand, the continued impact of macroeconomic policies, a low year-earlier base and seasonal factors, Zhou noted.

The recovery of the industrial sector has widened, with improved accounts receivable and corporate turnover, Zhou added.

During the recent tone-setting Central Economic Work Conference in Beijing, Chinese leaders vowed to strengthen the counter-cyclical and cross-cyclical adjustments of macro policies, and they highlighted that sci-tech innovation should lead the development of a modern industrial system.

"The turnaround from negative to positive in firms' main business revenue was the completion of the bottoming-out phase in industrial growth. The next step should lead toward to a normal growth phase," Tian Yun, a veteran economist based in Beijing, told the Global Times on Wednesday.

In 2023, the momentum of industrial recovery outpaced that of the services sector, Tian added.

The outlook for 2024 is optimistic in terms of the continued improvement in operating conditions across the industrial sector amid policy support, Zhou noted.