China industrial profits slump at fastest pace in 14 months as demand weakens

China's industrial sector has recorded the sharpest decline in profits in over a year, largely attributed to weak domestic demand. Official data for November revealed a 13.1% year-on-year drop in profits, accelerating from a 5.5% decrease in October. This downturn was significantly influenced by a more than 47% plummet in profits within the coal mining sector. Despite an unexpected solid export performance, the data highlights the uneven recovery, heavily reliant on external factors rather than domestic strength. Notably, the automotive sector saw a 7.5% rise in profits, and high-tech manufacturing increased by 10.0%, suggesting that segments backed by policy are outperforming traditional heavy industry. There are expectations for further policy support by 2026 to stabilize growth, amidst broader economic uncertainties and structural adjustments. The significant profit slump reflects ongoing cooling activity, with weak domestic demand being the primary concern.