China industrial profits rise 4.2% in August, weakest monthly gain this year

The slowdown in August puts the focus back on how much support Beijing will offer to protect corporate earnings, and economists quoted in the reports expect it to lean harder on stimulus. Any move would matter for Chinese and broader Asian equities, particularly industrial and materials names exposed to weak domestic demand. The persistent rise in energy costs cited in the reports is a further squeeze on margins for energy-intensive manufacturers, and it links the profit picture to crude oil. The strength in chips and computing equipment shows how narrow the earnings recovery is, so traders will watch whether the tech-led gains can offset softer consumer-facing sectors. --- Earlier: China and U.S. to set up Trade Council and extend trade truce to January 2027 --- China's factory profits are still growing at a double-digit clip this year, but August showed the AI-led recovery running into weak demand and rising energy costs. Summary: China's industrial profits rose 4.2% in August from a year earlier, the slowest gain this year, according to official data released Monday. For January to August, profits at large industrial firms rose 15.7%, easing from 17.6% in the first seven months, per the National Bureau of Statistics. That is the fourth straight month of slower year-to-date growth since the 24.7% pace recorded in April. Growth this year has been led by the AI-fuelled boom in chips and computing equipment, after a rise of just 0.6% for all of 2025. Official manufacturing PMI readings showed contraction in July and August, retail sales slowed and the urban investment slump deepened in August, while industrial output rebounded on exports. Economists expect Beijing to lean harder on stimulus as consolidation accelerates in sectors facing weak demand and price wars. Profits at China's industrial firms grew 4.2% in August from a year earlier, the weakest monthly gain this year, official data showed on Monday, as manufacturers contend with persistent weakness in consumer