Chinese industrial profits recorded the fastest growth rate since June last month, with the prosperity of manufacturing driven by artificial intelligence offsetting the drag caused by the ongoing weakness in domestic demand.
Data released by the National Bureau of Statistics on Tuesday showed that profits of large industrial enterprises in September increased by 14.4% year-on-year. In the first nine months of this year, industrial profits grew by a cumulative 15.5%, slightly lower than the 15.7% increase during the period from January to September.
Since the beginning of this year, with Beijing's efforts to curb the widespread price wars in various industries, as well as the surge in demand for AI related equipment, industrial profits have turned positive and shown double-digit growth at an earlier stage of the year; previously, after three consecutive years of decline, industrial profits only managed a modest rebound in 2025.
The global AI craze, as well as the rise in commodity prices triggered by the Iran war, have boosted profits for miners, chip manufacturers, and raw material suppliers this year, despite downstream manufacturers facing increased input costs and weak domestic demand.
In the high-tech industry, particularly in the fields of AI and robotics, profit growth has outperformed consumer-related industries such as clothing, automobiles, and furniture.
Yu Weining, the chief statistician of the National Bureau of Statistics, stated that the profit growth mainly came from the soaring profits of the electronics and advanced technology manufacturing industries. The profit increase of manufacturers of specialized electronic materials exceeded three times, while the profit growth of manufacturers of semiconductor device equipment was 51.7%. This is due to the strong demand for AI computing power and storage over the past nine months.
Yu Weining stated that the AI computing power and data center construction have driven fiber optic manufacturers' profits to grow by more than six times, and cable manufacturers' profits also more than doubled year-on-year from January to September.
Producers of raw materials such as copper and aluminum have also benefited from the rising demand in industries related to AI and the renewable energy sector, with profits increasing by nearly 45% in the first nine months.
Shen Wanyue, a senior economist at the Oxford Institute for Economics, stated that investment in high-tech manufacturing and the capacity utilization rate of the electronics industry still exhibit resilience, supported by the global AI cycle and domestic policy priorities; however, overall investment and industrial capacity utilization rates remain weak.
She said that family needs are a weak link, as the downturn in the real estate market continues to drag down housing purchases and related durable goods consumption. She stated, "China's strong exports are not sufficient to completely offset the domestic weakness."
China's economy grew by 4.5% year-on-year in the third quarter, slightly faster than the previous quarter; the economic growth rate for the first nine months of this year was 4.6%, within the government's annual target range of 4.5% to 5%.
Consumption remains weak, with the total retail sales of consumer goods in September increasing by 1.1% year-on-year. Although this is better than expected, it is only slightly higher than the sluggish figure from August.
As concerns over local government debt intensify and the boost from consumer product trade-in subsidies wanes, Beijing has yet to introduce any large-scale new stimulus measures to boost domestic demand.
