China Industrial Profits Rise 18.7% in First Half of 2026

China's major industrial enterprises saw profits rise 18.7 percent year-on-year in the first half of 2026, totaling 3.95 trillion yuan. According to the National Bureau of Statistics, this growth was propelled by an artificial intelligence boom and surging demand for computing power, which drove electronic sector profits up 96.9 percent. Integrated circuit manufacturing saw a nearly 26-fold increase in profits, while computer manufacturing profits surged nearly sevenfold.

Despite the overall gain, June saw a deceleration in growth to 15.1 percent, down from 21.1 percent in May. This moderation highlights a two-speed recovery where high-tech exports and advanced manufacturing cushion weak domestic demand and a struggling property sector. For example, automobile manufacturing profits fell 19.5 percent during the first half of the year. Lower energy prices, following the normalization of tanker flows through the Strait of Hormuz, also impacted June figures.

The Government of China is aligning these trends with the 15th Five-Year Plan to prioritize advanced manufacturing in provinces like Jiangsu and Henan. Financial analysts from Morgan Stanley and JPMorgan suggest that while growth remains resilient due to exports, the Politburo may introduce more urgent fiscal support during its late July meeting to address domestic imbalances. Some economists project the broader economy will grow around 4.6 percent this year.