Profits earned by China’s major industrial enterprises surged 18.7% year-on-year in the first half of 2026, marking a sharp turnaround from the contraction recorded a year earlier as stronger exports, higher industrial prices and resilient manufacturing activity boosted corporate earnings.
Data released by China’s National Bureau of Statistics (NBS) showed industrial enterprises above the designated size — companies with annual main business revenue of at least 20 million yuan (US$2.95 million) — generated combined profits of 3.95 trillion yuan during the January-June period.
The performance represents a significant improvement from the first half of 2025, when industrial profits declined 1.8% year-on-year to 3.44 trillion yuan, reflecting the challenges posed by weak domestic demand, persistent factory-gate deflation and a prolonged property downturn.
The latest figures underscore the recovery in China’s industrial sector after a difficult 2025, with earnings growth supported by stronger overseas demand and improving producer prices.
According to Reuters, industrial profit growth eased only marginally from the 18.8% increase recorded in the first five months of 2026, suggesting manufacturers continued to benefit from resilient exports despite softer domestic consumption and ongoing weakness in the property market.
June alone saw industrial profits rise 15.1% year-on-year, although this represented a moderation from May’s 21.1% growth.
The rebound has been largely driven by manufacturing industries, particularly export-oriented and high-technology sectors, while some consumer-focused industries continued to face headwinds from subdued domestic demand.
Despite the stronger headline figures, the recovery remained uneven across industries.
China’s automobile manufacturing sector, for example, recorded a 19.5% decline in profits during the first half as intense competition and slower vehicle sales weighed on margins.
Economists noted that stronger industrial profitability could support broader economic activity by improving companies’ ability to invest and raise wages, although challenges linked to weak household spending and the property sector persist.
In the first half of 2025, state-owned enterprises recorded a 7.6% decline in profits, while manufacturing profits rose 4.5%, helping offset weakness in the mining sector, where profits fell 30.3%. Foreign-invested enterprises posted a 2.5% increase, while private enterprises recorded 1.7% growth.
