China’s industrial profit growth decelerated in July as export-driven sectors benefited from the global AI boom while domestic demand remained subdued, official data showed.
Industrial profits rose 11.2% year-on-year in July, down from a 15.1% increase in June, the National Bureau of Statistics reported. Over the first seven months of 2026, cumulative profit growth slowed to 17.6% from 18.7% in the first half of the year.
The divergence reflected a sharp contrast between AI-linked industries and those reliant on domestic consumption. The computer, communication and other electronic equipment manufacturing sector posted a 110% surge in profits for January–July, while non-ferrous metal smelting and rolling processing rose 91.8%. Fibre optics manufacturing soared 468.4%, optical cable manufacturing jumped 62.6%, and communication system equipment manufacturing increased 55.0%.
By contrast, consumer-facing and property-related industries continued to face pressure. China’s vice finance minister said late last month that additional fiscal support measures would be rolled out in a timely manner to bolster confidence amid weak domestic demand and external uncertainties.
Kweichow Moutai, the country’s largest liquor maker by revenue, reported a 2% decline in first-half net profit, reflecting cautious consumer spending, a property market slump and tighter official outlays. The company’s performance underscored broader challenges in premium goods segments.
The data covers industrial firms with annual revenue of at least 20 million yuan ($2.97 million) from main operations. China’s economy, valued at $20 trillion, remains sensitive to shifts in global demand and domestic policy support.
