Economy

China’s Industrial Profits Soar: Will the Surge Last Amidst Economic Headwinds?

China‘s industrial firms saw profits surge 21.6% in Sept., the largest gain in 2 years, driven by production and prices.

byAndres Castro

October 27, 2025, 12:48 AM

Workers in uniforms assemble electric cars on a busy factory production line.

The GAC Aion electric car factory in Guangzhou, China on Sep 26, 2025. By Ringo Chiu / Shutterstock.com.

Executive Summary

Chinese industrial firms’ profits surged 21.6 percent year-on-year in September, marking the largest monthly gain in nearly two years and the second consecutive month of robust growth.

Cumulative profits for the first nine months of 2025 increased by 3.2 percent, driven by a 9.9 percent year-to-date expansion in manufacturing earnings.

The profit surge is attributed to increased production, easing declines in factory-gate prices, government policies to curb excess capacity, robust foreign demand, and the rapid growth of “new-quality productive forces” like hi-tech manufacturing.

The Story So Far

The significant surge in Chinese industrial profits, marking the largest monthly gain since November 2023, is largely attributable to an uptick in production and an easing of declines in factory-gate prices. This recovery is further bolstered by government initiatives focused on reining in excess industrial capacity, mitigating cutthroat competition, and fostering “new-quality productive forces” such as hi-tech manufacturing, all while maintaining robust foreign demand despite ongoing US tariffs.

Why This Matters

The significant surge in Chinese industrial profits, the largest in nearly two years and driven by increased production, easing prices, and strategic government policies supporting high-tech manufacturing, signals a robust and sustained recovery in the sector. This trend suggests that China’s industrial economy is strengthening, potentially enhancing its resilience against external pressures like US tariffs and pointing towards a future driven by higher-value, innovative industries.

Who Thinks What?

The National Bureau of Statistics (NBS) and its analyst, Yu Weining, attribute the significant surge in industrial profits to active macroeconomic policies, the fostering of new economic growth points, and the rapid growth of “new-quality productive forces” such as hi-tech and equipment manufacturing.

Chinese industrial firms are experiencing their most significant earnings surge in nearly two years, with profits climbing 21.6 percent year-on-year, driven by an uptick in production and an easing of declines in factory-gate prices.

Chinese industrial firms experienced their most significant earnings surge in nearly two years in September, with profits climbing 21.6 percent year-on-year. This marks the second consecutive month of robust growth and has propelled cumulative profits for the first nine months of 2025 to a 3.2 percent increase, according to data released by the National Bureau of Statistics (NBS) on Monday.

Industrial Rebound Details

The 21.6 percent jump in September follows a 20.4 percent increase in August, indicating a sustained recovery in the sector. This latest figure represents the largest monthly gain since November 2023, underscoring a strengthening trend in China’s industrial economy.

Within the broader industrial landscape, manufacturers saw their earnings grow by 9.9 percent year-to-date. This expansion in the manufacturing sector helped to offset double-digit declines experienced by mining and gas production industries during the same period.

Drivers of Growth

The surge in profits is largely attributed to an uptick in production and an easing of declines in factory-gate prices. Government initiatives aimed at reining in excess industrial capacity and mitigating cutthroat competition have also played a role in stabilizing market dynamics.

Faster expansion in output has bolstered the earnings of Chinese factories and mines. This growth occurred even as foreign demand remained robust, despite ongoing US tariffs, further contributing to the positive financial performance.

Yu Weining, an analyst with the NBS, commented that the figures provide evidence of China implementing more active macroeconomic policies and fostering new economic growth points. Yu specifically highlighted the rapid growth of “new-quality productive forces,” including hi-tech manufacturing and equipment manufacturing industries, as key contributors to the profit recovery.

Economic Outlook

The sustained recovery in industrial profits, driven by both policy interventions and strategic industrial development, points to a strengthening trajectory for China’s industrial sector. This trend suggests a positive impact from the government’s focus on high-tech manufacturing and efforts to manage economic headwinds.