by XIN Yuan
China's industrial firms continued to show a gradual profit recovery in the first ten months of the year, even as October registered a decline.
The National Bureau of Statistics (NBS) said Thursday that profits at large industrial firms rose 1.9% in January to October, marking the third consecutive month of improvement in cumulative growth. In October, profits fell 5.5% from a year earlier because of a higher comparison base and faster growth in financial expenses.
Sector performance remained uneven. Mining stayed weak, with profits down 27.8% in the first ten months, though the decline narrowed. Manufacturing rose 7.7%, and utilities including electricity, heat, gas and water grew 9.5%.
Several major industries posted solid gains. Non-ferrous metals rose 14.0% from a year earlier. Electricity and heat suppliers climbed 13.1%, while electronics grew 12.8%. Food processing and electrical machinery also posted steady increases.
Equipment manufacturing continued to underpin the recovery. Segment profits rose 7.8% in January to October, adding 2.8 percentage points to overall industrial profit growth. The sector contributed 38.5% of total industrial earnings, two points higher than a year earlier.
High-tech manufacturing strengthened as well. Profits increased 8%, well above the broader industrial sector. Smart-electronics categories led the surge, with drone manufacturing and smart in-vehicle devices more than doubling from a year earlier. Integrated-circuit production and electronic materials also recorded strong gains, while semiconductor devices posted more moderate growth.
Analysts said the improvement remains gradual. LI Chao, chief economist at Zheshang Securities, told Jiemian News that excess capacity will not be resolved quickly. He said measures to curb inefficient competition and phase out outdated production could help lift industrial profits more clearly over the medium term.
ZHANG Di, a macro analyst at China Galaxy Securities, said firms are turning more optimistic and have started to rebuild inventories. He added that profits could continue to recover if demand holds up, although shifts in external demand and recurring cost pressures remain key risks.
Zhang said domestic-demand support and the global outlook, shaped by China–US talks and the Fed's rate path, will be critical for the profit recovery.
