China’s industrial profit growth is losing momentum: China’s industrial profits rose +4.2% YoY in August, the weakest YoY growth since November 2025. This also marks the 4th consecutive monthly slowdown in growth. Pressure is particularly visible in consumer-facing industries, where profits are falling in autos, clothing, and furniture. Domestic demand continues to weaken, with consumption growth slowing to near zero while manufacturers, property developers, and infrastructure builders are cutting spending. For the first 8 months of 2026, industrial profits were still up +15.7% YoY, but the gains are becoming increasingly concentrated, with the electronics industry contributing ~66% of total growth. At the same time, raw-material industries contributed +6.2 percentage points to the overall increase, supported by higher commodity prices. Weak domestic demand is weighing on China’s economy.