(Yicai) Oct. 27 -- China's industrial profits jumped almost 16 percent year on year in the first nine months of this year, driven by a doubling of earnings in the electronics sector.

Profits at industrial enterprises with at least CNY20 million (USD2.9 million) in annual revenue rose 15.5 percent from January to September and 14.4 percent in September alone, according to data released today by the National Bureau of Statistics. The electronics sector contributed 9.6 percentage points to overall profit growth in the January-September period.

Industrial profitability improved as companies reduced costs and boosted margins. The cost per CNY100 (USD15) of operating revenue at large industrial enterprises fell CNY0.45 (7 US cents) from a year earlier to CNY85.02 (USD12.80) in the first nine months, while their operating profit margin rose 0.44 percentage point to 5.68 percent, the data showed.

Looking ahead, industrial profitability is expected to remain resilient despite uncertainties in the global economic environment, according to Wen Bin, chief economist at China Minsheng Bank.

Policy support has helped lift profits. China has stepped up macroeconomic policy support and promoted the development of "new quality productive forces" based on local conditions, said Yu Weining, chief statistician at the NBS' industrial department. The Chinese concept refers to innovation-driven growth powered by advanced technologies and higher productivity.

Industrial production has continued to grow steadily, profits have risen at a relatively fast pace, and the industrial economy has made further progress toward higher-quality development, Yu added.

Policy Support and Outlook

Sustaining the profit recovery will hinge on stronger investment, resilient demand, and continued policy support.

Wen from Minsheng Bank said domestic policies to stabilize investment are increasingly translating funding into actual construction and other physical activity. Stronger efforts to clear overdue payments and curb disorderly low-price competition should also help improve corporate cash flow and profitability in some industries.

Meanwhile, sustained global investment in artificial intelligence infrastructure is expected to support the electronics, information technology, and equipment manufacturing supply chains, while exports of new energy vehicles, energy storage systems, and power equipment continue to show structural resilience, Wen noted.

However, tighter global monetary policy, uncertainty surrounding US trade policy, geopolitical tensions, and volatile energy prices could still disrupt external demand and increase corporate costs, he warned.

Tax and fee cuts and other relief measures have been effective in easing pressure on companies, Pang Ming, a member of the China Chief Economist Forum, previously told Yicai.

Steady industrial production and coordinated policy support have helped companies improve profit margins and keep costs under control, Pang said. Lower expenses and continued structural improvements have further supported the recovery in profitability, laying a stronger foundation for earnings growth, he added.

Editor: Emmi Laine