Tag: Factory activity

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China’s Industrial Profits Surge as AI and Chipmakers Power a High‑Tech Rebound

China manufacturers excel

China’s industrial sector delivered its strongest performance in more than half a decade in March 2026, with profits jumping 15.8% year‑on‑year, signalling a decisive shift in the country’s growth engine towards advanced manufacturing and AI‑related hardware.

The latest figures from the National Bureau of Statistics show first‑quarter profits rising 15.5%, marking the best opening to a year since 2017 outside the pandemic distortions.

The surge is highly concentrated. Traditional heavy industry remains subdued, but China’s high‑tech and equipment manufacturers are now carrying the industrial economy.

Tech manufacturing

Profits in high‑tech manufacturing soared 47.4%, while equipment makers posted a 21% rise. Beneath those aggregates lie extraordinary gains: optical fibre producers saw profits climb more than 300%, with optoelectronics and display‑device manufacturers also recording double‑digit increases.

These sectors sit at the heart of China’s AI infrastructure build‑out, from data‑centre components to semiconductor‑adjacent hardware.

Demand for “intelligent products” is also reshaping the landscape. Drone manufacturers reported profit growth above 50%, reflecting both civilian and dual‑use demand as China accelerates its push into autonomous systems and robotics.

This momentum comes despite a sharp rise in global oil prices following renewed tensions in the Middle East. Brent crude briefly topped $108 a barrel, raising concerns about margin pressure.

Partially insulated

Yet China appears partially insulated: a coal‑heavy energy mix, access to discounted Iranian crude and sizeable onshore inventories have softened the immediate impact.

Even so, analysts warn that a prolonged oil shock, tighter sanctions enforcement or disruption around the Strait of Hormuz could still weigh on costs later in the year.

China’s industrial profits are no longer being driven by property‑linked sectors or commodity cycles, but by the country’s accelerating investment in chips, AI hardware and advanced manufacturing — a structural shift that is beginning to reshape the contours of its economic recovery.

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China’s Industrial Profits Surge 21.6% in September 2025, Marking Strongest Growth in Nearly Two Years

Industrial profit surge in China September 2025

China’s industrial sector roared back to life in September, posting a 21.6% year-on-year increase in profits— reportedly the sharpest monthly gain in approximately two years.

The rebound offers a glimmer of optimism for the world’s second-largest economy, which has been grappling with sluggish domestic demand and a challenging global trade environment.

According to data released by China’s National Bureau of Statistics, the profit growth was broad-based, reportedly with 30 out of 41 major industrial sectors returning gains.

Key areas

Key contributors included the equipment manufacturing and automotive industries, both of which benefited from policy support and a modest uptick in consumer sentiment.

Analysts reportedly suggest the surge reflects a combination of easing input costs, improved factory output, and a low base effect from the previous year.

However, they caution that the momentum may not be sustainable without deeper structural reforms and stronger domestic consumption.

The September figures follow a 17.2% rise in August, indicating a tentative recovery trend after months of contraction earlier in the year.

Up but down

Still, cumulative profits for the first nine months of 2025 reportedly remain down 9% compared to the same period last year, underscoring the uneven nature of the recovery.

Beijing has recently stepped up efforts to stabilise the economy, including targeted fiscal stimulus and measures to support private enterprise.

Whether these gains can be sustained into the final quarter remains to be seen, but for now, September’s data offers a rare bright spot in an otherwise subdued industrial landscape.

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China’s industrial profit accelerates in April 2025 – despite Trump’s tariffs

China factory output

Despite the heavy tariffs imposed by former U.S. President Donald Trump, China’s industrial sector has demonstrated remarkable resilience.

In April 2025, industrial profits rose by 3%, marking the second consecutive month of growth.

This increase was largely driven by Beijing’s strategic policy measures, which cushioned the impact of the tariffs and supported private enterprises.

In the first four months of 2025 China’s industrial profits rose 1.4%, according to data released on 27th May 2025.

Trump’s administration had levied tariffs as high as 145% on Chinese imports, prompting Beijing to retaliate with its own trade restrictions.

However, rather than crippling China’s manufacturing sector, these tariffs led to a shift in trade dynamics. Chinese exporters successfully found alternative markets, particularly in Southeast Asia and Europe, mitigating the losses from reduced U.S. trade.

It isn’t unusual for businesses to weather and absorb such tariffs but more usually, the consumer bears the brunt and pays some, if not all, of the increased costs.

High-tech manufacturing and equipment production saw notable gains, with profits in these sectors rising by 9% in the first four months of the year.

Additionally, government subsidies for consumer electronics and appliances helped boost domestic demand, further stabilising industrial growth.

While state-owned enterprises reportedly faced challenges, private firms and foreign-invested businesses saw profits improve.

Analysts suggest that China’s ability to adapt to external shocks underscores the resilience of its industrial economy, even in the face of aggressive trade policies

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China factory activity shrinks

China factory output

China’s factory activity contracted for a second month in a row in November 2023.

Non-manufacturing activity hit yet another new low this year, signalling that the world’s second-largest economy was still not out of the woods and may require more policy support.

The official manufacturing purchasing managers’ index unexpectedly dropped slightly lower to 49.4 in November 2023 from 49.5 in October 2023, according to data from the National Bureau of Statistics released Thursday 30th November 2023.