China industrial profits stay resilient as economy leans on factories, exports

HUAIBEI, CHINA - JUNE 23: A worker produces smart switches at an equipment manufacturing enterprise on June 23, 2026 in Huaibei, Anhui Province of China. (Photo by Li Xin/VCG via Getty Images) Vcg | Visual China Group | Getty Images Profits at China's industrial firms grew more slowly though still at a double-digit pace in May, highlighting a widening divide in an economy leaning on factory output and overseas shipments to counter soft domestic demand. Economic growth remains fragile, hobbled by a prolonged property downturn and deep structural imbalances that continue to weigh on domestic activity. Meanwhile, companies seeking to escape intensifying competition at home face fresh uncertainty from the protracted Iran conflict. Profit growth at the country's industrial firms in May was 21.1% from a year earlier, easing from 24.7% in April , data from the National Bureau of Statistics (NBS) showed on Saturday. Profits for January-May climbed 18.8% over the corresponding period last year versus an 18.2% increase in the first four months. "Upstream sectors and the computer industry saw sharp rises, while downstream manufacturing remained under pressure, in line with the producer price index, suggesting that price improvement was the main driver of corporate profit growth," said Zhaopeng Xing, senior China strategist at ANZ. Earnings trends have diverged sharply across sectors. …