China's industrial sector maintained robust momentum in the first four months, with profits at major industrial firms growing at a faster pace, underscoring the resilience of the world's second-largest economy amid mounting external uncertainties, officials and experts said on Wednesday.

Strong gains in equipment manufacturing and high-tech sectors — together with accelerating profit growth in the raw materials sector — should undergird steady expected industrial expansion in the coming months, as policy efforts to curb "involution-style" competition continue to take effect.

However, analysts said structural divergences in the recovery still warrant attention, as profit pressures persist in some downstream and traditional sectors, including property-linked industries and consumer goods manufacturing, highlighting the need for more targeted policy support.

In the first four months, industrial enterprises with annual main business revenue of at least 20 million yuan ($2.95 million) saw their total profits climb 18.2 percent year-on-year to 2.44 trillion yuan, 2.7 percentage points faster than the growth recorded in the first quarter, said the National Bureau of Statistics.

In April alone, major industrial firms posted a 24.7 percent year-on-year increase in profits, accelerating from 15.8 percent growth in March, the NBS said.

The strong performance in industrial profits, according to Yu Weining, a statistician with the bureau, was underpinned by more proactive macroeconomic policies.

"With more proactive macroeconomic policies effectively implemented, industrial production kept growing at a relatively rapid pace and industrial product prices continued to recover, thereby driving faster growth in industrial profits," Yu said.

Emerging growth drivers were a key contributor. The NBS said profits in the equipment manufacturing sector grew 15.4 percent year-on-year in the first four months, contributing 5.4 percentage points to overall profit growth among major industrial firms. Meanwhile, profits in high-tech manufacturing jumped 44.8 percent, contributing 7.8 percentage points to overall industrial profit growth.

Tang Guanghua, an analyst at Shenyin & Wanguo Futures, said technological innovation and high-end manufacturing are becoming stronger drivers of corporate earnings, as gains from industrial upgrading continue to feed into profit growth.

"Tech-driven manufacturing sectors still have room to sustain earnings growth and are expected to play a continued role in advancing the high-quality development of the industrial economy," Tang said.

Luo Zhiheng, chief economist and head of the research institute at Yuekai Securities, also struck an optimistic note, saying the rapid development of artificial intelligence is playing an increasingly important role in shaping China's economic dynamics.

"On the pricing side, this has been reflected mainly in stronger prices for upstream materials, electronic equipment and computing power-related products," Luo said.

NBS data also pointed to stronger momentum in upstream industries. Profits at major raw material manufacturers surged 88.1 percent year-on-year in the first four months, contributing 10.3 percentage points to overall profit growth.

AI's impact on the economy is mainly reflected in incremental demand, Luo said, with AI-related investment generating new demand and boosting manufacturing activity through its spillover effects across industrial chains.

Improving sentiment was also mirrored in China's stock market, with the Shanghai Composite Index and the Shenzhen Component Index gaining 5.7 percent and 12.1 percent, respectively, in April.

"Profits have been on a solid recovery trajectory in 2026," said Lynn Song, chief economist for China at Dutch bank ING, adding that the data so far point to the first full-year increase in industrial profits since 2022.

While industrial profits have shown broad resilience, analysts cautioned that the recovery remains uneven across sectors, as some consumer goods manufacturers, property-linked industries and traditional processing sectors continue to face margin pressure, highlighting the need for more targeted support measures.

Zhang Di, chief macroeconomic analyst at China Galaxy Securities, said stronger policy support for equipment upgrades, infrastructure investment and consumption could help reinforce demand recovery in midstream and downstream sectors, while improving companies' willingness to restock and expand capital spending.