BEIJING — Profits of China's major industrial firms surged 34.3 percent year-on-year in 2021 as industrial production continued to recover, official data showed on Jan 27.

Industrial firms with annual business revenues of at least 20 million yuan (about $3.16 million) saw their combined profits reach 8.71 trillion yuan last year, data from the National Bureau of Statistics showed.

The full-year industrial profits were 39.8 percent higher than the 2019 level, putting the average annual growth for 2020 and 2021 at 18.2 percent.

In 2021, the combined revenues of those firms went up 19.4 percent from a year ago to 127.92 trillion yuan, and 32 out of 41 industries saw growth in profits.

In December alone, major industrial companies raked in profits of 734.2 billion yuan, up 4.2 percent year-on-year, NBS data showed.

"The rapid growth in production and sales has laid a solid foundation for improvement in profits," said Zhu Hong, a senior statistician with the NBS.

Zhu said falling production costs have significantly boosted profit margins, partly thanks to the government's financial support measures for the real economy.

In 2021, the cost per 100 yuan of industrial revenue was 83.74 yuan, 0.23 yuan lower than a year ago. The operating profit margin increased 0.76 percentage points to 6.81 percent.

Zhu emphasized the high-tech manufacturing sector, which played a leading role in the annual profit rise. In 2021, the high-tech manufacturing sector maintained rapid profit growth, rising 48.4 percent from a year earlier.

The sectors of pharmaceutical manufacturing and electronic and communication device manufacturing posted exceptionally strong profits, which expanded 77.9 percent and 44 percent from a year ago, respectively.

Due to high prices in commodities, the mining sector became another driving force for the broader industrial profit growth. Last year, upstream mining and raw material manufacturing companies saw their profits up 190.7 percent and 70.8 percent, year on year, respectively.

Despite the rapid rise in the full-year figure, Zhu cautioned against a growth decline in November and December, noting that the downstream enterprises, especially the small firms, are still under pressure and that challenges remain for industrial development this year.

More efforts should boost the core competitiveness of the manufacturing sector, strengthen the real economy, help enterprises tide over difficulties and further stimulate market vitality, Zhu said.