China’s industrial profits accelerate in September as sector gap widens
Profits at large industrial firms rose 14.4% from a year earlier, but strong electronics earnings contrasted with a steep fall in furniture manufacturing.
China’s industrial profits rose 14.4% in September from a year earlier, official figures released on October 27 showed, accelerating from August as strong electronics earnings contrasted with losses in other manufacturing sectors. The figures cover large industrial firms, making the uneven performance important to understanding how widely the improvement is being felt.
The September increase was up from 4.2% in August, Reuters reported in an article republished by Channel NewsAsia. CNBC described it as the strongest monthly growth since June. Across the first nine months of the year, profits rose 15.5%, slightly below the 15.7% gain recorded for January through August.
Electronics gains and furniture losses
The split is pronounced in the nine-month figures. Profits in computer, communication and other electronic equipment manufacturing more than doubled, Reuters reported, while furniture-manufacturing profits fell by more than half. That comparison shows why faster growth in September does not describe the experience of every factory sector.
CNBC reported further gains among suppliers linked to advanced electronics: profits at electronic special-material manufacturers more than tripled, while those at semiconductor-device-equipment makers rose 51.7% over the nine months. CNBC attributed those figures to the National Bureau of Statistics and described demand for AI computing power and storage as a support for the sector.
The measure covers industrial firms with annual revenue of at least 20 million yuan from their main operations, according to Reuters. It therefore tracks a defined group of larger producers rather than every business in China. The nine-month increase also measures a different period from September’s single-month rise.
What is supporting profits, and where demand is weak
Shena Yue, a senior economist at Oxford Economics, told CNBC that investment in high-tech manufacturing and capacity use in electronics remained resilient, supported by global AI demand and domestic policy priorities. Overall investment and industrial utilization were still subdued, she said, while the property downturn continued to weigh on household purchases of homes and related durable goods.
CITIC Bank International’s chief China economist, Ding Meng, expressed optimism about the outlook because of growth in AI-related industries, Reuters reported. The reports point to AI-related demand as one source of strength, but the profit figures themselves do not isolate how much it contributed to the overall September increase.
National Bureau of Statistics statistician Yu Weining said China would continue using economic policy to support growth, expand domestic demand and improve supply, according to Reuters. The stated policy focus comes as the figures show strong earnings in electronics alongside much weaker results in consumer-facing furniture manufacturing.
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Sources and context
- China industrial profits post strongest growth in three months as tech boom widens economic divideCNBC
- China's industrial profit growth picks up amid deepening economic divergenceReuters (republished by Channel NewsAsia)
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