Profits at China's industrial corporations rose more than 20% for a second straight month, marking the fastest growth in two years. Foreign media said the result reflected the combined effect of the Chinese government curbing excessive price competition among corporations and a base effect.
On the 27th, China's National Bureau of Statistics announced that September industrial profits increased 21.6% from a year earlier. That was the biggest gain since November 2023 and far exceeded the market forecast compiled by Bloomberg News. Those surveyed were industrial corporations with annual revenue of 20 million yuan (about 4 billion won) or more.
The industrial profit growth rate (year over year) fell for three straight months starting in May, then recorded a 20.4% increase in August, with the gain widening in September. On a cumulative basis for January–September, profits rose 3.2%. As of January–July, they were still at -1.7%, but turned to growth (0.9%) in January–August.
By type of corporation, state-owned corporations fell 0.3% from a year earlier, while private corporations rose 5.1%. By industry, electricity and heat production and supply (14.4%), nonferrous metal smelting and rolling (14%), agricultural and food processing (12.5%), and computer, communications, and other electronic equipment manufacturing (12%) led the gains. Profits declined markedly in coal mining and washing (-51.5%), oil and natural gas extraction (-13.3%), and textiles (-5.9%).
Bloomberg News said, "Despite U.S. tariff, export demand has remained resilient, and industrial profits are rising as the pace of output growth accelerates," adding, "In recent months, the pace of price declines has also slowed, as the Chinese government has taken steps to curb overproduction and 'bleeding' competition." It added, "However, considering last year's base effect, the current strength of the recovery remains fragile."