(Yicai) Oct. 27 -- China's industrial profits soared 21.6 percent last month, the fastest pace in nearly two years, as a result of effective economic policies and a low base of comparison a year ago.

September’s rate of profit growth at industrial firms with at least CNY20 million (USD2.8 million) in annual revenue quickened from 20.4 percent in August, according to figures released by the National Bureau of Statistics today.

The surge can be attributed to effective policy support and a rebound in demand, Pang Ming, a senior researcher at the National Institute for Finance and Development, told Yicai.

In the first nine months of the year, profits rose 3.2 percent from a year earlier, versus a 0.9 percent increase in the first eight months, indicating a faster recovery in the industrial sector, the NBS data also showed.

Operating profit margin was 5.5 percent last month, roughly the same as in August, while the cost and expense per CNY100 (USD14.06) of operating revenue continued to drop month over month, Pang said, indicating that companies made firm progress in controlling costs and improving product mix.

Monthly revenue growth has accelerated for two consecutive months, creating favorable conditions for the sustained recovery of corporate profits, noted Yu Weining, a chief statistician at the NBS.

Operating revenues rose 2.4 percent in the January to September period from a year ago, up from a 2.3 percent increase in January to August, according to the data. The figure jumped 2.7 percent last month from a year earlier after rising 1.9 percent in August.

Against the backdrop of a complicated external environment and continued pressure on economic development, efforts should continue to expand domestic demand, further stimulate market vitality, boost development expectations, and promote the healthy and stable development of the industrial economy, Yu pointed out.

More policies are still needed to drive up profits, according to China Galaxy Securities. Key areas include the continuity of domestic demand-boosting policies, the implementation of “anti-involution” measures, especially those to address price competition and the squeeze on profit margins, and the impact of overseas demand and geopolitical risks, the brokerage said.

In the short term, attention needs to be paid to progress in the China-US trade talks and the impact of the US Federal Reserve's rate cuts on overseas demand, it added.

Editor: Martin Kadiev