Chinese industrial firms saw their highest earnings surge in nearly two years last month, as production revved up while declines in factory-gate prices eased amid a government campaign to rein in excess capacity.

Industrial profits climbed for the second straight month in September, rising 21.6 per cent from a year earlier, their biggest gain since November 2023. That followed a 20.4 per cent jump in August.

For the first nine months of the year, profits were up 3.2 per cent, according to data released Monday by the National Bureau of Statistics (NBS). Among manufacturers, earnings grew 9.9 per cent this year to date, helping offset double-digit declines for mining and gas production.

Faster expansion in output propped up the earnings of Chinese factories and mines, as foreign demand remained robust despite US tariffs. Price declines also slowed in recent months, with the government acting to curb overcapacity and cutthroat competition.

Yu Weining, an NBS analyst, said in a separate statement the figures were evidence that China has “implemented more active and promising macro policies, cultivated and expanded new economic growth points.

“New-quality productive forces, including hi-tech manufacturing and equipment manufacturing industries, grew rapidly,” Yu said, adding that profit growth continued to recover thanks in part to the statistical effect of a low base last year.