China's Industrial Profits Grow at Slower Pace in June Amid Falling Energy Prices
According to data released by China’s National Bureau of Statistics, industrial profits rose 15.1% year-on-year in June but marked the second consecutive monthly slowdown after a peak of 21.1% growth in May. The deceleration is attributed to falling energy prices that reduced price gains which had fueled this year's rebound from nearly three years of factory-gate deflation. The AI-driven boom in chip and equipment manufacturing has contributed significantly to the recovery, with industrial profits rising by 18.7% for the first half of the year compared to a similar period last year. However, economists note that much of this reflation is driven by global energy costs rather than strong domestic demand. Investors are now looking ahead to China’s Politburo meeting in late July where policy direction will be set following the second-quarter slowdown. While easing language is expected, large-scale stimulus remains unlikely due to resilient exports and efforts to curb excess factory capacity.
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Topics: AI manufacturing boom China economic growth industrial profits