China’s industrial profit growth rebounds 14.4% in September amid ‘AI boom’ boost

[Financial News] Industrial profit growth in China hit a three-month high in September. The producer price index (PPI) rose 5.0% year on year that month, its highest level in more than four years.
China’s National Bureau of Statistics (NBS) announced on the 27th that industrial profit growth in September rose 14.4% year on year.
This was the highest growth rate since June. Industrial profit growth slowed to 11.2% in July and 4.2% in August before rebounding in September. It also exceeded Bloomberg Economics’ forecast of 12%.
Some analyses suggest that rising oil prices due to the Iran War and the artificial intelligence (AI) boom drove up producer prices last month, contributing to the increase in industrial profit growth.
Industrial profits rose 15.5% year on year in January–September. The growth rate was slightly lower than the 15.7% recorded in January–August, marking a fourth consecutive monthly decline on a year-to-date basis.
Industrial profit growth among foreign- and Hong Kong, Macao and Taiwan-invested companies was 0.5% in January–September, down from 2.3% in January–August.
NBS Chief Statistician Wei Weining said the January–September figures showed that new growth drivers had played a particularly prominent role in driving growth.
He first said, “Profits in the electronics industry rose 100% in January–September,” explaining that profit growth was particularly strong in electronic specialty materials manufacturing (220%) and semiconductor discrete device manufacturing (51.7%), supported by demand for AI computing power and advanced memory.
He also noted that profits in high-tech manufacturing grew 52.0% in January–September, citing profit growth in optical fiber (570%) and optical cable (110%) manufacturing driven by computing power and data center construction. Profit growth in raw-material manufacturing was 44.9% in January–September; in particular, profits in the nonferrous metals industry rose 79.7%, thanks to demand for copper and aluminum used in AI and new-energy industries.
China’s industrial profits are compiled for companies with annual revenue from their principal business of at least 20 million yuan (about 3.97 billion won).
Meanwhile, as the People’s Bank of China injected liquidity into the banking system, the yield on China’s five-year government bonds touched an intraday record low of 1.34% that day.

[email protected] Lee Seok-woo, International Affairs Specialist Reporter