Profits at China's industrial firms rose 4.3% in the first quarter from a year earlier, National Bureau of Statistics (NBS) data showed, slower than a 10.2% rise in the first two months.

Profits fell 3.5% year-on-year in March. NBS did not break down monthly numbers for Jan-Feb, but had said at the time that monthly numbers have extended gains since August 2023.

The reading complemented a slew of economic indicators for March such as retail sales and industrial output that pointed to frail domestic demand despite solid first-quarter GDP growth.

Signs of the economy gaining momentum in the opening months were shown to have gradually given way to concerns over lacklustre demand at home.

Last week, senior officials at China's central bank signalled caution over the boost to credit as real credit demand weakens.

Earlier in April, Chinese electric vehicle battery company CATL (300750.SZ) saw its profit swing back to growth in the first quarter, but its revenue slid for the second consecutive quarter amid slowing demand and intensified competition.

Fitch has cut its outlook on China's sovereign credit rating to negative, citing risks to public finances as the economy faces increasing uncertainty in its shift to new growth models.

Industrial profit numbers cover firms with annual revenue of at least 20 million yuan ($2.76 million) from their main operations.

($1 = 7.2458 Chinese yuan renminbi)