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China’s industrial profits soared 21.6% in September from a year ago, the National Bureau of Statistics said Monday, as Beijing’s campaign to curb price wars helped ease pressure on manufacturers despite persistent trade tensions with the U.S.

That sharp jump, extending a strong rebound that began in August when the industrial profits jumped 20.4% year-on-year, marked the biggest gain since November 2023.

For the first nine months of the year, profits at major industrial firms grew 3.2%, the official data showed.

The rebound in corporate profitability was largely helped by Beijing’s policies aimed at curtailing fierce price competition across industrial sectors, at a time when deflation in producer prices stretched into its third year.

China’s consumer prices fell more than expected in September, slipping 0.3% from a year earlier, while the producer price index slumped 2.3%.

Chinese manufacturers have weathered uncertain trade policies with the U.S. and tepid consumer confidence at home as the world’s second-largest economy grappled with a prolonged housing downturn, weak labour market conditions and growing headwinds on its exports.

While the country’s overall exports have remained resilient this year, analysts expect the trade growth to slow in the final quarter, in part due to the high base last year.

“We expect export growth to slow in Q4, after an increase to 6.6% y-o-y in Q3 from 6.2% in Q2, due to a high base and rising trade barriers globally,” said a team of economists at Nomura.

China’s economy expanded 4.8% in the third quarter, marking the slowest rate in a year. Fixed-asset investment unexpectedly contracted 0.5% in the first nine months of the year — the first such decline since 2020 during the pandemic — according to data going back to 1992 from Wind Information.

Industrial output grew faster than expected in September, climbing 6.5% from a year ago, and up from 5.2% growth in the previous month.

The resilient headline figures suggest Beijing may not see much urgency in rolling out more stimulus measures to achieve its growth target of around 5% for this year, analysts said.

While Chinese policymakers pledged to boost domestic demand at a high-profile economic planning meeting earlier this month, they also stressed the need for technological breakthroughs in technological frontiers and upgrading the country’s industrial capabilities.

“References to ‘expanding domestic demand’ and ‘improving livelihoods’ are present but comparatively much less prominent,” said Louise Loo, head of Asia Economics at Oxford Economics.

“These suggest that while policymakers recognise weak household sentiment and a savings overhang, they don’t envision large-scale consumption stimulus over the next five years,” Loo added.

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