Ningbo, China – January 22: Employees work on a snowboard production line in a workshop to fulfill orders on January 22, 2026 in Ningbo, Zhejiang Province, China.
He Yuanhui/Zhejiang Daily News Group | Visual China Group | Getty Images
China’s industrial profits in 2025 increased by 0.6% year-on-year, breaking from three consecutive years of decline as manufacturing production expanded despite weak domestic demand.
The pace of growth accelerated from 0.1% in the January-November period, data from the National Bureau of Statistics showed.
Tiancheng Xu, senior economist at the Economist Intelligence Unit, said last year’s recovery was driven by policy interventions, particularly the Chinese government’s campaign to aggressively cut prices and companies’ efforts to expand overseas.
Industrial profits rose 5.3% year-on-year in December, the best performance since September, when profits rose 21.6%. Profits have been weak over the past two months, falling 5.5% in October and 13.1% in November.
China’s factory activity turned to increase in December after eight consecutive months of contraction, thanks in part to stockpiling ahead of the Lunar New Year holiday in February, statistics bureau officials said.
Profits at the country’s major industrial companies have been hurt by intense price competition that spread across several industries last year, as companies struggle with overcapacity due to weak consumer demand.
Beijing appears to be taking some comfort in last year’s economic growth, which hit its official target of 5%, helped by strong export growth as a year-long U.S.-China trade truce prevented tariff hikes.
But economists are calling for more policy support to boost domestic demand and broader economic growth. Retail sales in 2025 will increase by 3.7% year-on-year, lagging behind overall economic growth and a 5.9% expansion in industrial production.
China’s Ministry of Commerce official Yang Mu said in a press conference on Monday that the Chinese government will step up efforts to increase household spending on cars, home appliances and electronic products, while targeting consumption in the service sector.
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