Profits of China's major industrial firms fell 1.5 percent year on year in July, official data showed on Wednesday. The decline narrowed for the second consecutive month, indicating a steady recovery in the country's industrial sector.

National Bureau of Statistics (NBS) data showed that the contraction in July was 2.8 percentage points lower than that in June. For the January-July period, total profits of large industrial enterprises declined 1.7 percent from a year earlier, with the pace of decline narrowing by 0.1 percentage point compared to the first half of the year.

During the first seven months, these major industrial firms achieved a total revenue of 78.07 trillion yuan ($10.9 trillion), up 2.3 percent year on year, while total profits reached 4.02 trillion yuan.

A notable bright spot was the high-tech manufacturing sector, where profits surged 18.9 percent in July, rebounding sharply from a 0.9 percent decline in June. This segment has played a leading role in driving the overall industrial recovery.

Yu Weining, statistician at the NBS, attributed the improvement to stable growth in industrial production and the gradual implementation of policies aimed at fostering reasonable increases in price levels, which have supported the recovery in corporate earnings.

Profits in the manufacturing sector overall increased by 6.8 percent year on year in July. Particularly outstanding performance was seen in industries related to national policy priorities. For instance, amid enhanced innovation capabilities in the semiconductor sector, profit in integrated circuit manufacturing skyrocketed by 176.1 percent.

The positive effects of recent government policies promoting large-scale equipment renewal and consumer goods trade-in were also evident. Profits in the manufacturing of electronic and electrical machinery specialized equipment surged 87.9 percent year on year in July, while the profit growth for computer manufacturing reached 124.2 percent.