China: factory profits fall to year low, but AI grows 110%

WHAT HAPPENED

Profits of large Chinese factories grew 11.2% in July, their slowest advance of the year. But companies in chips, computers, and artificial intelligence equipment increased their profits by 110% between January and July.

WHY IT MATTERS

China remains the world's great factory, but its companies are earning more slowly: a sign of lower domestic consumption. The exception is AI, which drives chips, copper, and aluminum, while consumption, appliances, and light manufacturing remain weak.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, it shows that China is not a single story: investments linked to AI can advance due to global demand even if the Chinese consumer slows down. Sectors like clothing, appliances, and durable goods face a tougher environment.