China's industrial profit growth picks up amid two-speed economy

Business Recorder · 27/10/2026، 3:28:54 AM

BEIJING: China’s industrial profits grew at a faster pace in September, though a deepening divergence across the economy continued to weigh on business earnings. Profits at industrial firms rose 14.4% from a year earlier last month, quickening from a 4.2 increase in August, data from the National Bureau of Statistics showed on Tuesday. Profits were up 15.5% in the first nine months, compared with a 15.7% increase in the January-August period. While export-oriented firms brace for ⁠greater uncertainty as expanding trade surpluses heighten the risk of external pressures, firms tied to domestic demand continue to grapple with subdued consumption, casting a shadow over the sustainability of profit growth. The sectoral divide remained pronounced. Profits in the computer, communication, and other electronic equipment manufacturing category soared 103.8% in the first nine months, whereas the furniture manufacturing sector posted a 51.3% decline, making it one of the weakest performers and highlighting the uneven ⁠nature of China’s economy. A stronger-than-expected 4.5% expansion in the third quarter put China within reach of its annual growth target of 4.5% to 5.0%, but disparities across different parts of the economy suggest the recovery remains unbalanced, with persistent weakness in ⁠some sectors continuing to erode corporate profitability. That pressure has become increasingly visible at the company level. Net profit at the world’s largest electric vehicle battery maker, CATL, slowed ⁠sharply in the past quarter, as intense competition in the EV battery market squeezed margins at a time when China’s auto sales were ⁠in a downturn. Industrial profit figures cover firms with yearly revenue of at least 20 million yuan ($3.0 million) from main operations.