Jakarta, CNBC Indonesia - Profits of Chinese industrial companies\nsoared in March 2026, showing strong resilience amid global energy price\nturbulence due to Middle East conflicts. The latest data indicates a\nsignificant surge in earnings, driven by the boom in the artificial\nintelligence (AI) and semiconductor sectors.<\/p>\n
The National Bureau of Statistics (NBS) recorded that industrial\nprofits rose 15.8% year-on-year in March, marking the fastest growth in\nthe past six months. This figure is higher than the 15.2% increase in\nthe January-February period.<\/p>\n
Cumulatively, industrial company profits in the first quarter of 2026\ngrew 15.5% year-on-year, becoming the strongest start to the year since\n2017, excluding the anomalous surge during the 2021 pandemic.<\/p>\n
\u201cThis growth is mainly supported by the equipment and high-tech\nmanufacturing sectors,\u201d said Yu Weining, chief statistician at the NBS,\nas quoted by CNBC International.<\/p>\n
He detailed that profits in the equipment sector jumped 21%, while\nhigh-tech manufacturing rocketed 47.4% in the first quarter.<\/p>\n
The AI and chip industry explosion became the main driver. Profits of\noptical fibre producers even surged up to 336.8% compared to the\nprevious year. Meanwhile, optoelectronics and display device producers\nrecorded profit increases of 43% and 36.3%, respectively.<\/p>\n
Demand for smart products also boosted performance. Drone producers\u2019\nprofits rose 53.8%, in line with increasing adoption of consumer devices\nbased on smart technology.<\/p>\n
Not only that, the upstream sector also recorded a recovery. Raw\nmaterial producers\u2019 profits jumped 77.9% in the first quarter, supported\nby the shift of oil refineries to profitable zones. Strategic industries\nsuch as aerospace, new energy, and next-generation information\ntechnology also contributed to major profit surges, including the\nnon-ferrous metals sector which rose 116.7%.<\/p>\n
Meanwhile, President and Chief Economist of Pinpoint Asset\nManagement, Zhiwei Zhang, assessed that exports were one of the main\nsupports for growth. He noted that in the first quarter, China\u2019s exports\ngrew 14.7% in US dollars, the fastest pace since early 2022. Assuming an\nexchange rate of Rp17,000 per US$, this increase equates to around\nRp249.9 trillion for every additional US$14.7 billion.<\/p>\n
\u201cHowever, the Middle East conflict will continue to burden the\neconomy in the second quarter, especially through rising energy prices\nand weakening global demand,\u201d said Zhang.<\/p>\n
Rising energy prices are indeed starting to be felt. Brent crude oil\nprices have surged around 48% since the conflict escalation at the end\nof February, pushing up raw material costs such as chemicals, fibres,\nand plastics across the global supply chain. Nevertheless, China\u2019s\nenergy structure, which relies more on coal and renewables, provides a\nbuffer against such turbulence.<\/p>\n
China\u2019s chief economist at Morgan Stanley, Robin Xing, said that\naround 70% of companies in 32 industrial sectors reported smaller cost\nshocks and lighter production disruptions compared to global\ncompetitors.<\/p>\n
\u201cChina is in a relatively better position and has the potential to\ncapture export market share amid major but not extreme energy shocks,\u201d\nhe said.<\/p>\n
Nevertheless, pressures have not fully eased. Slowing global demand\ncould hold back export momentum, while high imported energy costs could\ncontinue to squeeze profit margins. Domestically, the weakening property\nmarket and sluggish labour market also burden demand, triggering price\ncompetition in various sectors.<\/p>\n
However, there are improvement signals from the price side. China\u2019s\nproducer price index (PPI) returned to positive growth in March, driven\nby rising oil prices, ending the longest deflationary period in\ndecades.<\/p>\n
Morgan Stanley forecasts that producer inflation will rise 1.2% this\nyear after falling 2.6% the previous year, while consumer inflation is\nprojected to increase to 0.8% from last year\u2019s stagnant conditions.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/world-growing-hotter-chinas-profits-soar-wildly-1777287296", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }