China posts first annual rise in industrial profit in 4 years in 2025

BEIJING — Industrial profit in China rose last year for the first time since 2021, government data showed on Tuesday (Jan 27), as a campaign against price wars and other excessive competitive practices relieved the pressure on corporate earnings.

Weak growth in the US$19 trillion (S$24 trillion) economy prompted official rebukes for sectors such as autos and solar panels where profit margins were squeezed in the pursuit of market share. The intervention has yet to halt a years-long decline in producer prices but an export boom has helped offset weak consumption.

Profit at industrial firms rose 0.6 per cent for the whole of 2025 versus a year earlier, the first gain in four years. That growth compared with a 0.1 per cent increase in the 11 months through November, showed data from the National Bureau of Statistics (NBS).

For December alone, profit rose 5.3 per cent from the same month a year earlier. That reversed a 13.1 per cent on-year fall in November.

Export diversification away from the US cushioned the economy from the impact of US President Donald Trump's tariffs on Chinese imports.

Strong exports helped the auto industry end 2025 with a 0.6 per cent rise in profit, reversing an eight per cent fall a year earlier.

"The impact of changes in the external environment is gradually deepening," said NBS statistician Yu Weining.

"There are pains in industrial transformation and upgrading, and some enterprises are still facing certain difficulties in production and operation," Yu said.

Policymakers aim to boost consumption in the services sector under a broader push to encourage the purchase of the eventual fruits of industrial output, thereby addressing industrial over-capacity and reducing reliance on overseas demand.

State-owned industrial firms saw profit fall 3.9 per cent last year whereas privately run firms' profit was flat while foreign firms recorded a 4.2 per cent gain, the data showed.

Industrial profit figures cover firms with annual revenue of at least 20 million yuan (S$3.64 million) from main operations.

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