Key figures:

• Jan–Jul 2026 total industrial profits: 4.58206 trillion yuan, +17.6%.
• Electronics manufacturing profits: +110%; integrated-circuit industry profits: +1,750%.
• Revenue: 80.92 trillion yuan, +6.5%; profit margin: 5.66%, +0.54 pp.
• Unit cost: 85.00 yuan per 100 yuan revenue, down 0.47 yuan.

Profits at China’s large industrial firms rose at a brisk pace in the first seven months of 2026, lifted by surging electronics earnings, stronger margins and a continued recovery in manufacturing. The standout performance came from electronics-related industries, where demand tied to artificial intelligence and computing infrastructure helped deliver triple-digit profit growth.

From January to July, industrial enterprises with annual main business revenue above 20 million yuan reported total profits of 4.58206 trillion yuan, up 17.6% from a year earlier on a comparable basis, according to the National Bureau of Statistics (NBS). July alone saw profits at large-scale industrial firms rise 11.2% year on year.

The expansion was broad-based across major enterprise categories. State-controlled enterprises posted profits of 1.49189 trillion yuan, up 16.3%. Joint-stock enterprises earned 3.54940 trillion yuan, an increase of 23.6%. Private firms recorded profits of 1.13522 trillion yuan, up 10.9%, while foreign-invested and Hong Kong-, Macao- and Taiwan-invested enterprises reported 1.01378 trillion yuan in profits, edging up 1.2%.

By sector grouping, mining profits rose 34.9% to 666.05 billion yuan. Manufacturing profits increased 18.8% to 3.43760 trillion yuan. The electricity, heat, gas and water supply industries recorded 478.42 billion yuan in profits, down 5.8%.

Electronics sector emerges as the main growth engine

The clearest driver of the overall profit gain was electronics. The computer, communications and other electronic equipment manufacturing sector saw profits jump 110%, adding 9.3 percentage points to total large-enterprise profit growth and becoming the single largest source of support for the headline increase.

Integrated-circuit-related production led the way. Driven by expanding “AI+” applications and strong computing-power demand, the IC sector—represented by computing-power chips and memory chips—saw profits surge 1,750%, contributing more than 80% of the electronics industry’s total profit increase. Other computer- and server-linked segments also advanced sharply: computer system manufacturing rose 330%, peripheral equipment manufacturing increased 250%, and industrial control computer and system manufacturing grew 160%.

Within electronics and telecommunications equipment, fiber manufacturing stood out with a 468.4% profit increase, while optical fiber cable manufacturing and communications system equipment manufacturing rose 62.6% and 55.0%, respectively. In electronic devices and components, electronic specialty materials manufacturing rose 226.8%, semiconductor discrete device manufacturing increased 45.8%, and electronic circuit manufacturing advanced 37.1%.

High-tech manufacturing and raw materials add momentum

High-tech manufacturing continued to move up the value chain. Profits in that category rose 50.1% and contributed 9.6 percentage points to overall industrial profit growth. In medical instrumentation and meters, navigation, surveying, meteorological and marine instrument manufacturing rose 157.8%, while dental equipment and appliance manufacturing increased 74.5%.

Raw-material industries also rebounded strongly. Profits in raw-material manufacturing climbed 55.2%, adding 7.1 percentage points to total growth. Non-ferrous metal smelting and rolling processing rose 91.8%, chemical raw materials and chemical products increased 56.6%, and petroleum processing turned profitable with 42.21 billion yuan in profits versus a loss a year earlier.

Among other major industries, coal mining and washing rose 50.4%, petroleum and natural gas extraction increased 15.4%, textiles advanced 7.9%, general equipment manufacturing edged up 1.4%, and special equipment manufacturing rose 0.8%. By contrast, electrical machinery and equipment manufacturing fell 7.6%, power and heat production and supply declined 8.0%, agricultural and sideline food processing dropped 12.3%, and auto manufacturing decreased 20.4%. Non-metallic mineral products fell 48.2%, while ferrous metal smelting and rolling processing dropped 51.2%.

Revenue grows while unit costs ease

Total operating revenue for large industrial enterprises reached 80.92 trillion yuan in the January–July period, up 6.5% year on year, while operating costs rose 5.9% to 68.79 trillion yuan. The revenue-to-profit margin improved to 5.66%, up 0.54 percentage points from a year earlier and the highest level for the January–July period since 2023.

Cost pressures eased further. For every 100 yuan of revenue, costs averaged 85.00 yuan, down 0.47 yuan year on year, extending a run of year-on-year declines in cumulative unit costs so far in 2026. Expenses per 100 yuan of revenue were 8.41 yuan, down 0.09 yuan.

As of the end of July, total assets at large industrial enterprises stood at 195.76 trillion yuan, up 6.4%, while liabilities rose 7.1% to 114.33 trillion yuan and equity increased 5.5% to 81.43 trillion yuan. The asset-liability ratio was 58.4%, up 0.3 percentage points from a year earlier.

Receivables totaled 28.88 trillion yuan, up 8.5%, and finished-goods inventory reached 7.27 trillion yuan, up 10.8%. Revenue generated per 100 yuan of assets was 72.2 yuan, up 0.3 yuan. Per-employee revenue reached 1.913 million yuan, up 125,000 yuan. Finished-goods inventory turnover took 21.3 days, 0.6 days longer than a year earlier, while the average receivables collection period was 71.9 days, 0.9 days longer.

Officials cite progress, but flag demand challenges

NBS industrial department chief statistician Yu Weining said the data reflected steady industrial production and the continued build-out of new growth drivers under active macroeconomic policies. He attributed the profit gain to a 6.5% rise in industrial revenue, supported by sustained increases in industrial product prices.

“The high-tech manufacturing sector played a clear leading role,” Yu said, adding that the electronics industry was the main support for the faster profit expansion. He also pointed to efficiency gains from lower unit costs and improved profitability.

Still, officials struck a cautious note. “The international environment remains complex and severe, and the contradiction between strong supply and weak demand at home is still relatively prominent,” the NBS statement said. It called for further steps to expand domestic demand, optimise supply, promote traditional-industry upgrading, and support emerging and future industries.

For investors tracking China’s industrial cycle, the numbers underscore a two-tier pattern: technology-linked manufacturing and select raw-material industries are providing the strongest earnings lift, while several traditional manufacturing and consumer-facing industrial segments remain under pressure.