China's high-tech manufacturing sector drove a strong rebound in industrial corporate profitability in July, with aerospace, semiconductors and biopharmaceuticals leading the recovery and underscoring the country's push toward advanced technologies and greater self-reliance, official data showed on Wednesday.

Figures from the National Bureau of Statistics showed that profits of high-tech manufacturing industries surged 18.9 percent year-on-year in July, reversing the 0.9 percent drop in June.

According to the NBS, China's industrial profits continued to decline in July, but at a slower pace, suggesting a gradual stabilization across the broader economic landscape.

Analysts said the latest data indicates that innovation is steering industrial enterprises toward higher value-added segments, while government efforts to rein in rat-race competition are beginning to ease strains from cutthroat pricing and overcapacity in certain sectors.

Looking forward, they expect the recovery in corporate earnings to gain further traction, underpinned by stronger policy support and an improving business environment. They added that the momentum points to a sustained rebound in the broader economy through the remainder of the year.

"The performance of industrial enterprises has continued to improve this year, with a more evident trend of profit recovery," said Tang Guanghua, an analyst at Shen-yin & Wanguo Futures Co.

"Notably, rapid profit growth in the high-tech manufacturing sector suggests that innovation is driving industrial firms toward higher value-added fields."

Investor sentiment mirrored the momentum in advanced industries.

On Wednesday, Chinese AI chipmaker Cambricon Technologies briefly overtook liquor giant Kweichow Moutai to become the country's most valuable onshore stock. Cambricon's shares rose nearly 10 percent in intraday trading to over 1,460 yuan ($204) per share before closing at 1,372.1 yuan, up 3.24 percent from the previous day.

NBS data showed that the semiconductor industry was among the strongest contributors.

Profits in integrated circuit manufacturing surged 176.1 percent last month, while semiconductor equipment makers saw earnings jump 104.5 percent, the NBS said.

The biopharmaceutical sector also maintained solid momentum, with profits climbing 36.3 percent in biomedicine manufacturing and 6.9 percent in chemical drug formulation in July.

"Overall, as macroeconomic policies continue to take effect and the market environment improves, industrial companies are expected to sustain their profit recovery, which will bolster the high-quality growth of the industrial economy," Tang added.

In July, major industrial enterprises saw their total profits dip 1.5 percent year-on-year, following a 4.3 percent decline in June.

For the January-July period, China's industrial profits dropped 1.7 percent year-on-year to 4.02 trillion yuan after a 1.8 percent decline in the first half.

NBS statistician Yu Weining attributed the improvement to the steady growth in industrial output, supported by policy efforts to stabilize prices and boost demand.

Wen Bin, chief economist at China Minsheng Bank, said that China's industrial profits are likely to continue a moderate recovery in the coming months, as the impact of extreme weather fades, supply and demand gradually normalize, and both orders and production regain momentum.

"Industrial profits could see a mild year-on-year increase in a single month, while cumulative growth maintains a steady upward trajectory," he said.

ouyangshijia@chinadaily.com.cn