In November 2025, the profits of China’s industrial enterprises decreased at the fastest rate in over a year. This trend indicates the difficulties in the country’s economic recovery and heightens expectations for additional economic stimulus.
This is reported by Finway
Reasons for the Decline in Industrial Profits
According to data from the National Bureau of Statistics of China (NBS), industrial profits fell by 13.1% year-on-year in November, while the decline in October was 5.5%. Experts cite the weakening of domestic demand as the main reason for the sharp drop, which overshadowed even the positive dynamics of exports. An additional factor remains the persistent deflation of producer prices, which increases pressure on the authorities and prompts them to seek new ways to stimulate consumer activity.
Outlook and Industry Trends
“Profitability will improve in the context of ‘anti-involution’,” he noted, referring to the idea that companies will gradually reduce investments and excessive competition over time. He also mentioned that firms will be able to “earn more abroad—albeit at the expense of their global competitors.”
For the first 11 months of 2025, the total profits of China’s industrial companies increased by only 0.1% year-on-year. This represents a significant slowdown compared to the 1.9% growth in the previous 10 months. The substantial decline in the coal industry, where profits fell by 47.3%, also had a significant impact.
In the fourth quarter, a general cooling of economic activity is observed, highlighting the chronically low demand from households. Despite the slowing growth rate of the economy, which stands at around $19 trillion, the Chinese authorities have not yet implemented any new large-scale stimulus measures.