China industrial profits jump 15.8% in March, fueled by AI and chip boom despite oil shock risks
Employees work on the solar panels production line at the workshop of Jiangsu DMEGC New Energy Co., Ltd. in Suqian, China’s Jiangsu Province, on July 22, 2025.
VCG | Visual China Group | Getty Images
Profits at China’s industrial companies rose at the fastest pace in six months in March, even as the Middle East war roiled global oil markets and soared raw material costs.
Industrial profits rose 15.8% year-on-year in March, the sharpest growth since September last year. Office for National Statistics data It showed on Monday that it was accelerating after a 15.2% increase in the first two months of this year.
Corporate profits increased by 15.5% in the first three months of this year, the fastest start to the whole year since 2017Except for the pandemic-related increase in 2021.
NBS chief statistician Yu Weining said: accelerated overall profit growth largely driven by the equipment and high-tech manufacturing sectors; The profits of these sectors increased by 21% and 47.4%, respectively, in the first quarter.
The boom in artificial intelligence and semiconductors led to massive profit growth in many subsectors in the first three months of the year. While the profits of optical fiber manufacturers increased by 336.8% compared to the previous year, manufacturers of optoelectronics and imaging devices gained 43% and 36.3%, respectively.
Demand for smart products has also boosted earnings in emerging sectors. Drone manufacturers’ profits increased by 53.8%, while other smart consumer device manufacturers’ profits increased by 67.3%.
According to NBS data, a number of strategic emerging industries such as aerospace, new energy and next-generation information technology led to a 116.7% increase in the profits of non-ferrous metal companies.
Raw material producers’ earnings also increased by 77.9% in the first quarter compared to the previous year, as oil refineries made profits.
The rise follows a period of stabilization in 2025, when industrial companies delivered modest growth of 0.6% after earnings contracted for three consecutive years.
The rising profits came even as rising global oil prices began to infiltrate the domestic economy and put pressure on the margins of manufacturers dependent on imported raw materials.
Brent Crude oil prices have risen nearly 48% since the start of U.S.-Israeli attacks on Iran in late February, driving up costs for chemicals, fibers and plastics in the global supply chain.
The oil shock comes as companies’ profits are already under pressure, with domestic demand remaining sluggish due to a prolonged downturn in the property market and a gloomy job market fueling cross-sector price wars.
The global rise in metal prices and Beijing’s effort to rein in excess production capacity and cut-throat competition have contributed to easing deflationary pressure.
China’s producer price growth turned positive in March, driven by higher oil prices, marking the first expansion in more than three years and ending the longest deflationary streak in decades.
Large onshore stocks of Iranian oil and crude in tankers at sea have provided some buffer for the world’s largest importer.
The Trump administration said Friday it was sanctioning an independent “teapot” refinery in China for buying billions of dollars’ worth of Iranian oil, potentially damaging a key energy source that accounts for a quarter of China’s refining capacity.
