21st Century Business Herald:

How did industrial enterprises above designated size perform in the first quarter? What were the main characteristics? How can we assess the future development trend of China's industrial production? Thank you.

Mao Shengyong:

Thank you for your questions. The industrial sector performed exceptionally well in the first quarter, achieving a good start to the year. The growth of industrial production accelerated, industrial upgrading continued to deepen, the transformation from old to new growth drivers sped up, enterprise profits improved and development resilience continued to be demonstrated, laying the foundation for high-quality industrial development throughout the year. There have been several notable characteristics.

First, production growth accelerated steadily. In the first quarter, the total value added of industrial enterprises above designated size grew by 6.1% year on year, 1.1 percentage points faster than that in the fourth quarter of 2025. By sector, 34 out of 41 major industrial categories maintained growth, accounting for 82.9% of all categories. Among them, key sectors such as electrical machinery and electronics grew 7.3% and 13.6%, respectively, contributing 7.5% and 21.4% to the overall growth of industrial enterprises above designated size.

Second, industries improved in quality and upgraded. The industrial structure continued to improve, with high-end manufacturing leading industrial growth. In the first quarter, the value added of equipment manufacturing industries above designated size increased by 8.9% year on year, accounting for 35.1% of the total value added of all industrial enterprises above designated size, marking the 37th consecutive month that its share has exceeded 30% and further underscoring its role as a stabilizer of the industrial economy. By product, output of mid-to-high-end equipment grew rapidly, with power generator sets rising 15.1% and railway locomotives climbing 63.8%. The value added of high-tech manufacturing industries above designated size increased 12.5%, significantly faster than the overall growth rate of industrial enterprises above designated size. By sector, the value added of industries such as integrated circuit manufacturing and biopharmaceutical manufacturing increased 49.4% and 14.8%, respectively, indicating that the production and supply structures are accelerating their shift toward the mid-to-high end of the value chain.

Third, the transformation of growth drivers accelerated. Traditional industries accelerated their technological transformation and green transition, and the enabling effects of new quality productive forces gradually became more apparent. In the first quarter, the value-added output of bio-based materials manufacturing and biomass fuel processing grew 26.3% and 39.6%, contributing 34.4 percentage points and 2.1 percentage points to the growth of traditional industries such as chemical fibers and petroleum processing, respectively. Intelligent manufacturing has been advanced in greater depth, and digital and smart transformation has become more deeply integrated. In the first quarter, the value added of the digital product manufacturing industry rose 11.2%, 5.1 percentage points higher than the overall growth rate of industrial enterprises above designated size. By sector, the value added of intelligent equipment manufacturing, as well as electronic components and equipment manufacturing industries rose 16.9% and 16.1%, respectively.

Fourth, expectations for business performance improved. In the first two months, profits of industrial enterprises above designated size grew 15.2% year on year, 14.6 percentage points faster than the full-year growth rate of the previous year. Among them, the profits of equipment manufacturing and high-tech manufacturing enterprises increased 23.5% and 58.7%, respectively, driving a broad improvement in corporate earnings. Improved business performance has boosted expectations and confidence. On the leading indicators front, the manufacturing PMI returned to expansion zone in March, reaching 50.4%, up 1.4 percentage points from the previous month. Among them, the index of expectations for manufacturing production and business activities was 53.4%, increasing month by month since the beginning of the year.

Fifth, development resilience became evident. Despite multiple pressures such as escalating international geopolitical conflicts, global energy market volatility and rising factor costs, China's industrial economy forged ahead against headwinds and accelerated steadily. Leveraging its vast domestic market, complete industrial system and strong supporting capabilities, China kept its industrial and supply chains secure and stable, effectively cushioning external risks and shocks. This demonstrated the strong resilience and risk-resistance capacity of China's industrial economy, providing a solid foundation for stabilizing the overall macroeconomic situation. In the first quarter, the value added of China's manufacturing sector increased 6.3% year on year, contributing 32% to overall economic growth.

In summary, the industrial economy maintained steady progress in the first quarter, with continued improvements in quality and efficiency. The integration of high-end, green and intelligent technologies accelerated. At the same time, external uncertainties remain, and some enterprises still face difficulties, such as profitability pressures. Therefore, we need to fully act on the guiding principles from the Central Conference on Economic Work and implement the plans adopted at the sessions of the NPC and the CPPCC National Committee, develop new quality productive forces in light of local conditions, strengthen support for enterprises, and strive to solve practical difficulties, in a bid to achieve better business performance and drive the steady, high-quality development of the industrial economy. Thank you.

Jia Huili:

Due to time constraints, we will have two more questions.