Illustration: Xia Qing/GT

Amid the growing discussion about China's economic resilience in light of US President Donald Trump's tariff policies,MK sport recent data present an optimistic outlook. As of Sunday, 529 companies listed on the Shanghai Stock Exchange had issued positive earnings estimates for 2024. This includes 248 companies anticipating earnings increases, 112 companies expecting to return to profitability, and 169 companies projecting reduced losses, according to a report from the Shanghai Securities News on Monday.

Just a few days earlier, a Wall Street Journal article claimed that "companies across the country are bleeding cash," and that "those problems are leaving China unusually vulnerable as President Trump tightens the screws with a new 10 percent tariff on Chinese goods." Is this truly the case? The positive earnings estimated figures reported by Shanghai Securities News suggest that the narrative of an "unusually vulnerable" Chinese economy is fundamentally misguided.

In 2024, despite facing a complex and challenging environment, the total value added of industrial enterprises above the designated size increased by 5.8 percent over the previous year, according to the National Bureau of Statistics. Notably, high-tech manufacturing saw an impressive increase of 8.9 percent, which is a commendable achievement.

In 2024, the total profits of industrial enterprises above the designated size amounted to 7.43105 trillion yuan (approximately $1.0171 trillion), which sharply contrasts with the Wall Street Journal's depiction of "companies across the country bleeding cash." Although this figure represents a 3.3 percent decline compared with the previous year, a report by the People's Daily indicated that the decline significantly narrowed in the fourth quarter, with profits shifting from a decrease to an increase in December.

According to the report by the Shanghai Securities News, the performance of various companies listed on the Shanghai Stock Exchange supported this trend. During this period, nearly 60 percent of the companies that issued performance forecasts reported year-on-year growth for the fourth quarter of 2024. Experts attribute this positive development to the introduction of a set of incremental policy measures in September 2024 aimed at stabilizing the economy, which significantly bolstered market confidence and enhanced societal expectations, according to the Shanghai Securities News.

As China's economy transitions and upgrades toward higher-quality development, technological innovation has brought significant growth opportunities to sectors such as high-tech industries and high-end manufacturing. The profits and performance outlook of related enterprises continue to improve, leading to higher market forecasts.

In the high-end manufacturing sector, China's chip manufacturing giant SMIC's revenue in the third quarter increased by 14 percent sequentially to $2.17 billion, a record high, reaching the milestone of $2 billion in a single quarter for the first time. The company noted in its third quarter financial report that it expects a gross margin projected to be between 18 and 20 percent in the fourth quarter.

With the rise of the DeepSeek fervor, the profit outlook for Chinese artificial intelligence (AI) companies has become increasingly optimistic. In a recent research report, CITIC Securities pointed out that Chinese AI companies are expected to achieve significant excess returns in the next one to two years.

The new quality productive forces will become the main driving force behind China's high-quality economic growth. Technological development is driving an increase in corporate profits, particularly in sectors such as AI, new energy, high-end manufacturing and healthcare, all of which demonstrate significant growth potential.

It is undeniable that some companies are facing challenges. However, despite these difficulties, policy support has generated numerous opportunities across various sectors. Private and foreign enterprises are also capitalizing on favorable policies to strengthen their competitiveness through technological innovation and market expansion.

For example, the China Securities Regulatory Commission on February 7 issued a guideline stating the need to increase support for strategic emerging industries such as AI. It encourages high-quality technology companies to go public and vows to optimize the systems for mergers and acquisitions and equity incentives for listed technology companies. These policies provide AI companies with broader development space and financial support, further enhancing the market's expectations for the future profitability of related enterprises.

The narrative saying that Chinese enterprises are vulnerable to US tariffs and other containment policies is fundamentally misguided. China International Trade Representative and Vice Minister of Commerce Wang Shouwen in November highlighted China's capacity in dealing with external shocks, largely owing to its resilient and vibrant economy that has great potential, noting that China is building a "dual circulation" development pattern, which takes the domestic market as the mainstay while allowing the domestic and international markets to reinforce each other.

The author is a reporter with the Global Times. [email protected]