BEIJING, Dec 27: Profits at China’s industrial firms in November plunged at their fastest pace in over a year, as sluggish domestic demand outweighed resilient exports, underscoring the challenges facing the country’s economic recovery and fueling calls for additional policy stimulus.
Data from the National Bureau of Statistics (NBS) showed that industrial profits fell 13.1% year-on-year in November, accelerating sharply from a 5.5% decline in October. The drop comes despite stronger-than-expected export performance and persistent factory-gate deflation, highlighting continued pressure on household consumption and the need for targeted policy measures.
For the first 11 months of 2025, industrial profits rose only 0.1% compared to the same period last year, slowing from 1.9% growth seen between January and October. The coal mining and washing sector experienced a sharp 47.3% fall in profits, contributing significantly to the weak overall performance.
While Beijing remains cautiously optimistic about achieving its official 2025 growth target of around 5%, economists note that further policy support may be needed to strengthen domestic demand and sustain broader economic growth.
Sector-wise, some bright spots emerged amid the overall decline. The automotive industry posted a 7.5% rise in profits, improving by 3.1 percentage points from the January–October period. High-tech manufacturing also showed resilience, with profits up 10% year-on-year, an improvement of 2 percentage points from earlier in the year.
China’s economic momentum has eased toward year-end, with the Rhodium Group estimating 2025 GDP growth at just 2.5–3%, driven by a collapse in fixed asset investment in the second half of the year.
Policymakers have pledged to maintain a “proactive” fiscal policy in 2026 to support consumption and investment, while also focusing on employment, household spending, price stabilization, and reviving the property market, which continues to face challenges.
The NBS noted that the industrial profit figures cover firms with annual revenue of at least 20 million yuan ($2.85 million) from their main operations, providing a snapshot of profitability across China’s industrial sector.