This episode contains segments on:
- China’s March industrial profits;
- China’s March inbound foreign direct investment;
- Q1 per capita disposable income;
- China issues warning over the EU’s Industrial Accelerator Act.
- The European Chamber is conducting a flash survey among its members on the impact of the Middle East conflict on European companies in China.
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Read More:
China Industrial Profits March
https://www.stats.gov.cn/sj/zxfb/202604/t20260427_1963403.html
China’s Inbound Foreign Direct Investment (FDI) March
https://www.mofcom.gov.cn/xwfb/rcxwfb/art/2026/art_5129fc44d6584feca60c898006e75e21.html
Q1 Per Capita Disposable Income
China issues warning over the EU’s Industrial Accelerator Act
https://www.globaltimes.cn/page/202604/1359938.shtmlhttps://single-market-economy.ec.europa.eu/document/download/9bc8eb85-4d43-4025-be7b-c86b9f3648ec_en?filename=Proposal%20establishing%20measures%20for%20industrial%20capacity%20and%20decarbonisation%20in%20strategic%20sectors%20.pdf
Transcript:
RUI: Hello and welcome to China ShortCuts,
FRANCESCA: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 29th April 2026.
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FRANCESCA: Profits of major industrial enterprises in China—firms with an annual income of at least CNY 20 million per annum—jumped 15.5% year-on-year in Q1.
RUI: Particularly strong performance was seen in the manufacturing sector, where major enterprises registering a 19.1 per cent increase in profits, as well as the mining industry, where profits grew on average by 16.2 per cent.
FRANCESCA: By contrast, the picture was bleaker for major industrial enterprises operating in the electricity, heat, gas and water production and supply space, where industrial profits fell by 3.2 per cent relative to Q1 2025.
Company bottom lines also took a hit in the automobile manufacturing industry — an area where oversaturation and ongoing price wars has led to companies having to rely on high sales to compensate for razor-thin margins. Profits in the sector among major industrial firms fell by 17.7 per cent during the first three months of the year.
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FRANCESCA: China received 249.6 billion yuan in foreign direct investment, or FDI, between January and March 2026 according to data published by the Ministry of Commerce, a 7.3 per cent drop year-on-year.
RUI: Keeping in line with previous years, increased FDI continued to flow into high-tech industries, with this growing in value terms by 30.7 per cent year-on-year to CNY 102.73 billion.
FRANCESCA: Overall, FDI into high-tech industries in China accounted for 41.2 per cent of total FDI received by the country, up 12-percentage points relative to Q1 2025. The fastest rate of growth was seen in R&D and design services, where FDI grew by 127.8 per cent in year-on-year between January to March 2026.
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FRANCESCA: Average per-capita disposable income across China averaged CNY 12,782 in Q1 2026, according to data published by China’s National Bureau of Statistics.
RUI: This represents a nominal increase of 4.9 per cent year-on-year, or four per cent in real terms after excluding price factors. Disposable income exceeded CNY 10,000 per person in 17 of China’s 31 provincial-level regions in Q1 2026. Shanghai ranked first at CNY 26,689 per head, Beijing second at CNY 24,587, and Zhejiang province third at CNY 23,611.
Disparity remains between per-capita rural and urban disposable income levels, with the former standing at CNY 7,433 and the latter at CNY 16,549 in Q1 2026.
FRANCESCA: Chongqing, Inner Mongolia, Anhui, Hubei, and Hunan were the strongest performers in central and western China. This was partly due to increases in industrialisation and urbanisation, as well as the formation of modern industrial clusters in major cities located in the region, leading to an uptick in regional employment and income levels.
While these consistent increases are a positive sign, further expansion of disposable income will be necessary to lift China’s domestic consumption. The mismatch between supply and demand on the Chinese domestic market and subsequent high levels of exports contributed to trade tensions with China’s trading partners, including the EU.
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FRANCESCA: On Monday 27th April, a spokesperson for the Chinese Ministry of Commerce criticised the EU’s Industrial Acceleration Act, asserting that it, “runs counter to basic market economy principles”, and that the MOFCOM would enact countermeasures if the EU did not take China’s suggestions for the regulation into account.
RUI: Proposed by the EU Commission on 4th March, the Industrial Accelerator Act, or IAA, aims to ensure that manufacturing accounts for 20 per cent of the EU’s GDP by 2035, up from 14.3 per cent in 2025.
The IAA states the EU will achieve this goal by “accelerating permitting for all manufacturing projects, and by providing a toolbox to provide access to the European single market in a way that prevents strategic dependencies, creates manufacturing jobs, boosts decarbonisation and climate performance and secure access of European citizens and companies to vital commodities and products at all times.”
Notably, it establishes a framework for what ‘Made in Europe’ procurement entails, with this including a framework for the imposition of conditions on foreign direct investments in emerging strategic sectors, where the investment value exceeds EUR 100 million.
FRANCESCA: The IAA is the latest in a set of legal tools introduced by the EU, aimed at protecting the integrity of its Single Market and Europe’s own industrial competitiveness, as well as ensuring reciprocal market access and a level playing field for European companies operating in third markets.
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RUI: The ongoing conflict in the Middle East has disrupted business operations worldwide. To better understand how European companies operating in China have been impacted, as well as if and what action they are taking in response, the European Chamber has invited all member companies to take a short flash survey.
FRANCESCA: More information about the survey can be found at the link in the show description.
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RUI: Thanks for listening, and don’t forget to tune in next week.
FRANCESCA: In the meantime, please find useful links in the episode notes.