China August Industrial Profit Growth Slows to 4.2% as Weak Demand Offsets AI-Driven Tech Gains

China's industrial profit growth decelerated sharply in August, with profits rising 4.2% year-over-year, down from 11.2% in July, as weak domestic demand and excess capacity offset strength in technology manufacturing, National Bureau of Statistics data showed on Sept. 28, 2026. For the January-August period, profits grew 15.7%, easing from 17.6% in the first seven months. Computer, communication and other electronic equipment manufacturing led gains with a 110% surge, while wine, beverages and refined tea manufacturing profits fell 34.7%. Factories are increasingly relying on overseas markets for better margins, a shift that risks deepening China's export dependence amid heightened geopolitical tensions and scrutiny of its trade surplus. A central bank adviser warned this month that AI may worsen China's imbalance between robust supply and subdued demand, reinforcing calls for measures to boost consumer spending.