China’s industrial profits rose 4.2% year on year in August 2026, slowing sharply from July’s 11.2% increase as weak domestic demand and excess capacity pressured companies’ pricing power. In the first eight months of 2026, industrial enterprises above designated size recorded profits of 5.27198 trillion yuan, or approximately $785.9 billion, up 15.7% year on year and easing from 17.6% in January-July. Technology manufacturing remained a major source of growth, with profits in computer, communication and other electronic equipment rising 110%, while profits in wine, beverages and refined tea manufacturing fell 34.7%. Mining profits rose 35.1% and manufacturing profits increased 17.4%, but utilities declined 12.0%. Companies are increasingly relying on overseas markets for stronger returns, raising concerns about export dependence and trade tensions. A central bank adviser warned that artificial intelligence could worsen the imbalance between strong supply and subdued demand, reinforcing calls to boost consumption and strengthen corporate balance sheets.