Profits of Chinese industrial companies rose 4.2% in August — CNBC

In China, profits at major industrial enterprises rose by 4.2% year-on-year in August, the weakest result since the beginning of the year. Manufacturers are facing persistent weakness in consumer demand and a prolonged increase in energy costs, CNBC reports.

Slowing growth

From January through August, profits at major industrial companies increased by 15.7%. After the first seven months of the year, the figure stood at 17.6%, while in April the growth rate reached 24.7%. Thus, the slowdown has continued for the fourth consecutive month.

At the same time, industrial profits in China have recovered noticeably this year. For all of 2025, they increased by only 0.6%, the first increase after three years of decline. The current double-digit growth has been largely supported by a boom in the production of chips and computer equipment linked to the development of artificial intelligence. It also coincided with the end of nearly three years of producer price deflation.

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Pressure on the economy and manufacturing

China's economic growth slowed in the second quarter to its weakest pace in more than three years. The official purchasing managers' index showed a contraction in manufacturing activity in July and August for the second consecutive month.

In August, retail sales growth also slowed and the decline in urban investment deepened. At the same time, industrial production recovered thanks to exports. Economists expect Beijing to use stimulus measures more actively to stabilize corporate profitability amid consolidation in sectors with weak demand, intense competition and price wars.