China’s industrial profits edge up in 2025, reversing three years of declines as Beijing curbs price wars
NINGBO, CHINA – JANUARY 22: Employees work on a snowboard production line in a workshop to fulfill orders on January 22, 2026 in Ningbo, China’s Zhejiang Province.
He Yuankai/Zhejiang Daily Press Group | Visual China Group | Getty Images
China’s industrial profits rose 0.6% from the previous year in 2025, surpassing three consecutive years of declines, as manufacturing output increased despite weak domestic demand.
The growth rate has accelerated since: 0.1% in January-November This period, according to data from the Office for National Statistics.
Tianchen Xu, senior economist at the Economist Intelligence Unit, said last year’s recovery was driven by policy interventions, particularly Beijing’s campaign against aggressive price cuts and companies’ efforts to expand abroad.
Industrial profits rose 5.3% in December from a year earlier, the best performance since September, when earnings rose 21.6%. Profits fell in the previous two months; It fell 5.5% in October and 13.1% in November.
In December, China’s factory activity returned to growth after eight consecutive months of contraction, driven in part by growth. pre-holiday stocking This happened ahead of the Lunar New Year in February, an official from the statistics bureau said.
Last year, profits at the country’s major industrial firms took a hit as price wars ripped through various sectors as weak consumer demand left companies struggling with excess capacity.
Beijing appears to have taken some comfort from headline economic growth, which met the official target of 5% last year, helped by strong export growth as a one-year US-China trade truce kept high tariffs at bay.
But economists have called for more policy support to support domestic demand and broader economic growth. Retail sales increased by 3.7% in 2025 compared to the previous year, falling behind the overall economic growth and the 5.9% growth in industrial production.
Beijing will step up efforts to increase household spending on automobiles, household appliances and electronics, and target consumption in the service sector, Chinese Ministry of Commerce official Yang Mu said at a press conference on Monday.
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