According to official data released by the Chinese authorities, the profit growth of industrial enterprises above a certain scale in China has significantly slowed down. In August, the year-on-year profit growth of industrial enterprises above a certain scale was 4.2%, a significant drop from the 11.2% in July, hitting a new low for the year. From January to August, the year-on-year profit growth of industrial enterprises above a certain scale was 15.7%, also slower compared to the 17.6% growth from January to July.
In August 2026, it was reported by the National Bureau of Statistics of China that the profit of industrial enterprises above a certain scale increased by 4.2% year-on-year, which was lower than the 11.2% in July, showing a decrease of 7 percentage points and hitting a new low for the year again. The growth rate in July dropped by 3.9 percentage points from June, which was already a new low for the year.
Looking at the cumulative data, from January to August, industrial enterprises above a certain scale achieved a total profit of 5.27 trillion yuan, representing a 15.7% year-on-year increase, but a slight slowdown compared to the 17.6% cumulative growth from January to July. During the same period, the year-on-year growth of operating income for industrial enterprises was 6.6%, with an operating income profit margin of 5.66%.
Breaking it down by industry, from January to August, the profits of the mining industry increased by 35.1% year-on-year, manufacturing industry by 17.4%, while the profits of the electricity, heat, gas, and water production and supply industry decreased by 12%. Specifically, the profits of the computer, communication, and other electronic equipment manufacturing industry increased by 1.1 times year-on-year, non-ferrous metal smelting and rolling processing industry by 82.9%, while the profits of the automotive manufacturing industry decreased by 16%, agricultural and sideline food processing industry decreased by 17.4%, and ferrous metal smelting and rolling processing industry decreased by 62.4%.
It is worth noting that industrial production itself has not markedly slowed down. According to data from the National Bureau of Statistics, in August, the value added of industrial enterprises above a certain scale increased by 5.2% year-on-year, accelerating by 0.7 percentage points from July; with the manufacturing industry value added growing by 6.1%. This indicates that while industrial production continues to grow, the profit growth of enterprises has significantly slowed down, reflecting continued pressure on the profitability side of businesses.
Reuters points out that due to weak consumer demand in China and overcapacity in some industries, companies are finding it increasingly difficult to maintain pricing power. Factories are relying more on overseas markets to earn higher profits, and as geopolitical tensions rise and trade surpluses face greater scrutiny, this shift may further deepen China’s dependency on exports.