Surge in China's Industrial Profit Underpinned by Global AI Boom

China's industrial profit growth slowed in July though it remained in double digits, anchored by a global AI boom that continues to supercharge factory output and tech earnings.

Industrial profit in July rose 11.2% compared with the same period a year earlier, decelerating from June's 15.1% expansion, according to the National Bureau of Statistics on Thursday.

In the first seven months of the year, China's industrial profit increased 17.6% on year, after the 18.7% rise recorded in the first half of the year, the official data showed.

The rapid growth in China's electronics sector became the main pillar for China's industrial profit growth, said statistician Yu Weining from the statistics bureau.

The electronics sector saw profits from January to July surge 110% on year, single-handedly contributing 9.3 percentage points to overall industrial profit growth. The rapid expansion was anchored by the integrated circuit industry, where profits skyrocketed 18.5-fold and accounted for over 80% of the entire sector's gains, alongside substantial boosts to profits across server, computer, and component manufacturing.

While the electronics sector surged, heavy industries and automotive sectors faced notable headwinds during the same seven-month period.

Severe profit drops in steel, mineral, and auto manufacturing weighed heavily on overall performance, alongside single-digit declines in utilities and machinery, though petroleum processing managed to turn a profit.

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(END) Dow Jones Newswires

August 26, 2026 22:05 ET (02:05 GMT)