MNI China Press Digest April 28: Energy, Profits, Land Revenue

Highlights from Chinese press reports on Tuesday:

• China has effectively safeguarded energy security during the Venezuela crisis and the U.S.-Israel-Iran conflict, officials from the National Energy Administration told reporters. Domestic oil and gas supply remained stable and orderly in the first quarter, with crude oil output rising 1.3% year-on-year, while natural gas went up 3.0%. Raw coal production held steady on a high base, up 0.1% year-on-year. Officials warned that ongoing instability in the Middle East has driven sharp fluctuations in global oil and gas markets, underscoring the growing urgency of developing green fuels. They added that investment has accelerated in hydrogen energy, coal-to-oil and gas projects and new energy storage. (Source: Yicai)
• China’s industrial profits retain a basis for recovery, but growth may slow and divergence may widen, said Wen Bin, chief economist at China Minsheng Bank, after recent data showed profits at industrial firms above designated size rose 15.5% year-on-year in the first quarter. Domestic factors—including policy support, price recovery, lower costs and new growth drivers—will continue to underpin profits, but the imbalance between strong supply and weak demand remains unresolved, Wen said. Looking ahead, elevated oil prices may temporarily boost profitability in upstream resources but squeeze margins in mid- and downstream manufacturing. The divergence between upstream and downstream sectors, as well as between advanced manufacturing and traditional industries, is likely to deepen further, Wen said.
• Proceeds from the transfer of state-owned land use rights under local government fund budgets totalled CNY517.6 billion in Q1, down 24.4% year-on-year, according to data from the Ministry of Finance of China. Yan Yuejin, deputy director of the Shanghai E-House Real Estate Research Institute, told Yicai the decline reflected a shift to a “high-frequency, small-volume” land supply model, where local governments sell smaller batches but more frequently, allowing supply to better match developers’ tighter cash positions and more cautious, targeted investment strategies. Weak demand from property developers and a relatively high base a year earlier had also contributed to the decline. Yan said ongoing property market support measures and financing coordination mechanisms to resolve developers’ debt could help narrow the decline to single digits. Full-year land transfer revenue could exceed CNY3.8 trillion, implying a roughly 5% drop from last year, Yan added.