Profits of China's industrial companies rose 11.2% in July from a year earlier, the slowest growth rate in seven months, reflecting a slowdown in the manufacturing recovery amid weak domestic demand and a loss of momentum in the Chinese economy. The National Bureau of Statistics of China reported that in the first seven months of the year, industrial profits increased 17.6% from a year earlier, slowing from an 18.7% growth in the first half. The data covers industrial companies with annual main business revenue of at least 20 million yuan, or about 2.9 million U.S. dollars. Although the latest figures have slowed, the overall profitability of Chinese industrial companies this year has recovered significantly, supported by the global wave of investment in artificial intelligence that has boosted demand for Chinese computer equipment, electronics, and technology products. However, the momentum from the recovery in factory-gate prices is weakening, as producer price inflation slowed to 3.5% in July, while China's economic growth in the second quarter slowed to its lowest in over three years. Economists expect that Chinese authorities may increase targeted support measures to maintain the profitability of the business sector, especially in industries facing sluggish demand and intense competition. But the key pressure factors remain the property sector crisis, sluggish household confidence, and weak private investment.
