Industrial profits in China reach three-month high driven by AI and tech manufacturing
Industrial profits in China rose by 14.4 percent year-on-year in September. Growth in AI and high-tech manufacturing helped offset pressure from weak domestic demand, resulting in the strongest profitability performance in the last three months.
According to data released by China's National Bureau of Statistics, profits of large-scale industrial enterprises increased by 14.4 percent in September compared to the same period last year. This rise occurred as momentum in AI and technology-focused manufacturing limited the impact of weak domestic demand and fluctuations in commodity prices.
In the first nine months of the year, industrial profits increased by a total of 15.5 percent. Notably, profits for manufacturers of specialized electronic materials tripled, while a 51.7 percent increase was observed in the profits of semiconductor equipment manufacturers. Optical fiber producers increased their profits more than sixfold, thanks to demand for AI data centers.
Assessment: Experts point out that growth in the Chinese economy is increasingly diverging between technology exports and AI investments versus consumption-oriented sectors. The stagnation in the housing market and weak household demand continue to exert pressure on the overall economic outlook. The government's avoidance of large-scale stimulus to boost domestic demand, combined with the debt burden of local governments and issues of overcapacity, continues to strain economic balances.
Sources
- cnbc.com · Link