China’s industrial companies recorded a 1.5% year-on-year fall in profits in July, a marked improvement on June’s 4.3% drop and the mildest contraction since the slide began in May, according to National Bureau of Statistics data released on Wednesday. Cumulative earnings for the first seven months of 2025 were down 1.7% from a year earlier, easing from a 1.8% decline in the first half. The slowdown in the profit slump was driven by a rebound in high-tech manufacturing, where earnings jumped 18.9% from a year earlier. Overall manufacturing profits rose 6.8%, helped by stronger results from aerospace, semiconductors and electronic equipment makers. In contrast, energy-intensive sectors such as steel and petrochemicals only edged back into the black after months of losses. Policy moves to curb price wars and encourage equipment upgrades and consumer-goods trade-ins are beginning to filter through, officials said, but weak domestic demand and persistent factory-gate deflation continue to weigh on margins. Price-cutting pressure remains acute for solar-panel makers including Tongwei, JA Solar and Jinko Solar, all of which reported wider first-half losses. State-owned enterprises saw profits fall 7.5% in the January–July period, while private firms and foreign-funded companies each posted a 1.8% increase. Economists said Beijing may need to step up fiscal support and measures to revive confidence if it is to sustain the nascent recovery in corporate profitability.