Industrial profits slump

Zhu Haibin, chief economist in China at JPMorgan Chase & Co, suggested more economic reforms and policies for stabilizing growth. "Rather than government intervention, it would be better to boost industrial profits based on a positive real economic foundation. It is the key to a bullish equity market."

Zhao Yang, chief economist in China at Nomura Securities Co, said the country's monetary policy needs to remain accommodative in the coming months.

"We believe the negative impact from cooling financial markets and the positive impact from faster fixed-asset investment will continue in the second half," said Zhao.

He expected another cut by 50 basis points of the reserve requirement ratio and a 25 basis points cut of the benchmark interest rates this year, with the next move likely being a RRR cut in August.

The country's industrial production in June accelerated to 6.8 percent year-on-year, picking up from 6.1 percent in May, and supported a stable GDP growth of 7 percent in the second quarter.

Total power use to rise 3% during year

Total national energy consumption rose 0.7 percent in the first half of the year compared to last year, official figures showed on Monday, with a decline in coal use offset by increases in oil, natural gas and renewable power consumption.

The National Energy Administration said it expected energy consumption to inch up further in the second half, with total power use over 2015 likely to reach 5.7 trillion kilowatt-hours, up around 3 percent from last year.

Total consumption in 2014 was estimated to have reached 3.6 billion tons of standard coal equivalent, up just 0.3 percent from 2013, according to the National Bureau of Statistics.

China's energy consumption has tripled in just two decades but annual growth has now slowed considerably as a result of the economic downturn.

The impact has been felt disproportionately in the coal sector, which still accounts for around two-thirds of total energy consumption but is now the primary target of the government's war on pollution.

Coal production fell 5.8 percent to 1.79 billion tons in the first six months of the year, the NEA said. Fixed-asset investment in the sector plunged 12.8 percent, however, to 168.6 billion yuan ($27.15 billion).

Over the same period, crude oil output rose 2.1 percent to 110 million tons while natural gas production－including coalbed methane and shale gas－rose 4.3 percent to 67.4 billion cubic metres, the energy bureau said.

Total power generation rose 0.6 percent, it said, largely as a result of higher renewable and nuclear volumes.

The share of non-fossil fuel in total power generation has now hit 22.9 percent, up 3 percentage points from the same period of 2014, the administration said.