China’s industrial profits expanded by 21.1% year-on-year in May 2026, slipping from April’s 24.7%, yet still marking strong gains by global standards. The National Bureau of Statistics reported the decline, highlighting an ongoing recovery that remains uneven.
Between January and May, major industrial companies earned a total of 3.14 trillion yuan, up 18.8% compared to last year, slightly ahead of the pace recorded in the first four months. The headlines, however, mask sharp contrasts across industries and regions.
AI and Manufacturing Boost High Performers
Profits in the computer and communication equipment sector surged 103.9%, reflecting massive investments in artificial intelligence since early 2026. Metals processing followed closely with a 117.1% increase, while the chemical industry posted a 71.6% jump.
Despite these gains, sectors tied to domestic demand continue to struggle. The property market remains weak, exerting pressure on consumer confidence and household spending.
The automotive industry, a telling example, saw profits fall 19.8% even as China remains the largest car exporter globally. Overseas demand has not fully offset the domestic slowdown.
Profit growth also varied by ownership type: state-owned enterprises grew profits by 19.6%, joint-stock firms by 24.1%, but private companies lagged with only 10.7% growth.
