<div id="readability-page-1"><div><p>[BEIJING] Profits at China’s industrial firms grew at their quickest pace in half a year last month, adding to broader signs of an uneven economic recovery in the first quarter as policymakers brace for the impact of the Middle East war.</p><p>The country’s export engine stuttered last month while retail sales and industrial output cooled, although producer prices emerged from a years-long deflationary stretch, a shift that analysts warn could leave companies boxed in by rising costs but limited pricing power as demand remains fragile.</p><p>Profits at industrial firms rose 15.8 per cent in March from a year earlier, picking up from a 15.2 per cent jump in the January-February period, data released by the National Bureau of Statistics showed on Monday.</p><p>For the first quarter, industrial profits grew 15.5 per cent year-on-year as economic growth accelerated to 5 per cent after hitting a three-year low in the previous quarter.</p><p>The figures point to growing divergence beneath the surface of the recovery.</p><p>While pockets of the economy tied to artificial intelligence remain buoyant, with Shannon Semiconductor posting a 79-fold surge in first-quarter net profit on the back of strong AI-related electronics demand, consumer-facing sectors continue to struggle. </p><div><div><h3>Navigate Asia in<br/>a new global order</h3><p>Get the insights delivered to your inbox.</p></div></div><p>Premium liquor maker Kweichow Moutai reported subdued performance as chronically weak domestic demand weighed on pricing and volumes.</p><p>Policymakers see their campaign to curb so-called “involution” - persistent, cut-throat price competition - as supportive for corporate margins over time, but its benefits are slow to materialise amid a sputtering recovery.</p><p>External risks are adding to the pressure. The Middle East crisis has heightened uncertainty over global demand and supply chains, threatening to further erode margins for Chinese manufacturers already grappling with soft orders and cautious spending by households and businesses.</p><div><div><div><p>SEE ALSO</p><div><div><div><div><p><img height="2726" src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/74a2ce5b7f12a5a436a3f1a36e2260f5d198d6c008ab93d24bffbbc7177273dd/query-ZHByPTEmZj13ZWJwJnc9MjQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="4647" original-src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/74a2ce5b7f12a5a436a3f1a36e2260f5d198d6c008ab93d24bffbbc7177273dd/query-ZHByPTEmZj13ZWJwJnc9MjQw"/></p></div><p></p><h3><span>Singapore Open: South Korea’s Ham overcomes rain delay to claim his first international victory</span></h3><p></p></div></div><div><div><div><p><img height="3699" src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/c80e5d156e89c5629f15043fb3cadb0c5c4288f8acdd1ccc3979f9f711bd4c4b/query-ZHByPTEmZj13ZWJwJnc9MjQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="5548" original-src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/c80e5d156e89c5629f15043fb3cadb0c5c4288f8acdd1ccc3979f9f711bd4c4b/query-ZHByPTEmZj13ZWJwJnc9MjQw"/></p></div><p></p><h3><span>Nissan bets on ‘China speed’ to get back on its feet</span></h3><p></p></div></div><div><div><div><p><img height="2668" src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/86e151ef33f5b142f715f0984731711a9421d960bf0021c01474f63259a2b3c0/query-ZHByPTEmZj13ZWJwJnc9MjQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="4000" original-src="https://imageproxy.pbkrs.com/https://cassette.sphdigital.com.sg/image/businesstimes/86e151ef33f5b142f715f0984731711a9421d960bf0021c01474f63259a2b3c0/query-ZHByPTEmZj13ZWJwJnc9MjQw"/></p></div><p></p><h3><span>China to curb US investment in tech companies after Meta deal</span></h3><p></p></div></div></div></div></div></div><p>Industrial profit figures cover firms with annual revenue of at least 20 million yuan (S$3 million) from their main operations. REUTERS</p><div><p>Decoding Asia newsletter: your guide to navigating Asia in a new global order. <span>Sign up here to get Decoding Asia newsletter.</span> Delivered to your inbox. Free.</p></div></div></div>

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<p>Profits at China's industrial firms rose 15.8% in March, marking the fastest growth in six months, as the economy shows signs of uneven recovery amid external pressures from the Middle East crisis. For Q1, profits increased 15.5% year-on-year, with economic growth accelerating to 5%. However, while sectors linked to AI thrive, consumer-facing industries struggle due to weak domestic demand. Policymakers aim to improve corporate margins by addressing cut-throat price competition, but benefits are slow to materialize. Rising costs and fragile demand continue to challenge manufacturers.</p>

- China's industrial profits grew by 15.8% in March, indicating a recovery trend despite underlying disparities in the economy.  
- While the first quarter showed a 15.5% profit increase and overall growth accelerated to 5%, sectors focused on consumers remain challenged under weak domestic demand.  
- Rising external risks, notably from the Middle East conflict, threaten to further strain profit margins for Chinese manufacturers already facing uncertain demand and cautious spending patterns.

China’s industrial profit growth quickens even as Iran war heightens risks