China industrial profits post strongest growth in three months, rising 14.4%
The global AI boom and higher commodity prices stemming from the war in Iran have lifted earnings at miners, chipmakers and raw-material suppliers.
Key points
- Profits at large Chinese industrial firms rose 14.4% last month from a year earlier, the strongest growth since June.
- For the first nine months of the year, industrial profits climbed 15.5%, slightly below the 15.7% rise in the January-September period.
- An AI-driven manufacturing boom lifted earnings for miners and chipmakers while weak household demand and the property downturn weighed on consumer industries.
Profits at large industrial firms in China grew 14.4% last month compared with a year earlier, official data released Tuesday showed. It was the strongest pace since June, as an artificial intelligence-related manufacturing boom offset persistently weak domestic demand.
For the first nine months of the year, industrial profits climbed 15.5%, slightly below the 15.7% rise recorded in the January-September period.
What is driving the gains
Industrial earnings moved into double-digit growth earlier this year, following a modest gain in 2025 after three straight years of declines. Beijing's efforts to curb price wars across sectors and surging demand for AI-related equipment contributed to the turnaround.
The global AI boom and higher commodity prices stemming from the war in Iran have lifted earnings at miners, chipmakers and raw-material suppliers this year. High-tech sectors such as AI and robotics have outperformed consumer-related industries including clothing, autos and furniture.
China's export strength isn't able to fully offset its domestic weakness.
— Shena Yue, senior economist at Oxford Economics
Weak spots in the economy
China's economy expanded 4.5% in the third quarter from a year earlier, slightly faster than the previous quarter, taking growth in the first nine months to 4.6%. That is within the government's full-year target range of 4.5% to 5%.
Consumption remains soft, with retail sales growing 1.1% in September. Shena Yue, senior economist at Oxford Economics, said high-tech manufacturing investment and electronics capacity utilization remain resilient, while overall investment and industrial utilization are still subdued. She said household demand is the weak link as the property downturn continues to weigh on housing purchases and related durables.
