China: Weak domestic demand curbs industrial profit growth
While the profits of China's tech industry are soaring thanks to the AI boom, other industries are struggling with overcapacity and decreasing pricing power.
Beijing - The profit growth of China's industry slowed down in August due to persistently weak domestic demand, according to data from the National Bureau of Statistics (NBS). Industrial company profits rose 4.2 percent compared to the same month last year, as reported on Monday. The increase was down from 11.2 percent in July. In the first eight months of the year, profits grew by 15.7 percent, following a 17.6 percent rise from January to July.
The statistics cover companies with a minimum annual revenue of 20 million Yuan (2.98 million dollars) from their main business. While the artificial intelligence (AI) boom drove profits in the technology sector, companies in other sectors are increasingly struggling to maintain their pricing power due to consumer hesitance and overcapacity.
Computer manufacturing, communication, and other electronic device production saw profits rise by 110 percent in the first eight months. Conversely, the wine, beverage, and tea industry saw a 34.7 percent decline in profits.
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