China’s industrial profits rose for the second consecutive month in September, giving officials renewed optimism that the world’s second-largest economy may be stabilizing as companies managed to secure buyers despite weak domestic demand and ongoing trade tensions.
The $19 trillion economy had slowed to its weakest pace in a year during the third quarter, even as stronger-than-expected exports helped cushion fragile internal demand. However, rising geopolitical strains with Washington continued to overshadow manufacturers’ efforts to expand beyond China’s competitive domestic market.
According to data released by the National Bureau of Statistics (NBS) on Monday, industrial profits surged 21.6% year-on-year in September—the fastest pace since November 2023—following a 20.4% rise in August. For the first nine months of 2025, profits increased 3.2%, compared with a 0.9% gain in the January–August period.
NBS statistician Yu Weining attributed the improvement largely to gains in high-tech and equipment manufacturing, along with a favorable comparison to last year’s low base.
However, Nomura economists urged caution, noting that August’s sharp rebound, which ended a three-month decline, was also influenced by the low base effect and “should be taken with a grain of salt.” They suggested that the recent profit surge may not yet signal a broad-based recovery.
Weak domestic demand continues to pressure consumer-focused sectors. For example, Zhangzhou Pientzehuang Pharmaceutical, a leading traditional medicine producer, reported a 28.8% drop in third-quarter net profit, marking its second consecutive quarterly decline.
Despite these headwinds, China’s leadership has reaffirmed plans to boost domestic consumption under its new five-year plan. The government remains focused on strengthening manufacturing and achieving technological self-reliance, particularly amid growing competition with the United States.
By ownership type, state-owned firms recorded a 0.3% decline in profits during the first nine months of 2025, while private enterprises saw profits climb 5.1%, and foreign firms posted a 4.9% increase, according to NBS data.
The industrial profit figures cover companies with annual revenues of at least 20 million yuan ($2.81 million) from their main operations.
