In September, China's large industrial firms reported a 14.4% increase in profits compared to the same month last year, marking the strongest growth since June. For the first nine months of 2026, profits rose 15.5%, slightly below the 15.7% increase recorded in the same period last year.
This rebound in industrial earnings follows a period of decline, aided by government measures to stabilize prices and a surge in demand for AI-related technologies.
Notably, sectors such as electronics and advanced manufacturing saw significant profit increases, with profits for electronic special materials manufacturers more than tripling and semiconductor device equipment makers experiencing a 51.7% rise. The demand for AI computing power has also driven profits for optical fiber manufacturers up over sixfold.
However, the overall economic context remains challenging, with weak domestic demand and a struggling property market impacting household consumption. Retail sales grew only 1.1% in September, indicating that consumer spending is still sluggish.
Despite the industrial sector's strength, concerns about local government debt and the diminishing impact of consumer subsidies have led Beijing to refrain from implementing major stimulus measures to boost domestic demand.
China's economy grew by 4.5% in the third quarter, slightly above the previous quarter, but the outlook remains cautious as export strength cannot fully compensate for domestic weaknesses