China's Industrial Profit Down 1.1% From Jan-May, Signs The 2nd Largest Economy Weakening
Profits of China's major industrial firms fell 1.1% year-on-year in the first five months of 2025, according to official data released Friday by the National Bureau of Statistics (NBS). The decline underscores continued pressure on the world's second-largest economy as it grapples with weaker domestic demand, global economic uncertainty, and ongoing trade tensions.
The figures, which cover industrial enterprises with annual main business revenues of at least 20 million yuan (approximately USD 2.75 million), reflect a moderation in the country's post-pandemic recovery, as both external and internal challenges continue to weigh on corporate earnings.
According to the NBS, several key industries — particularly raw materials, chemicals, and manufacturing — continued to face declining profit margins due to soft domestic consumption, high input costs, and overcapacity in some segments.
Although high-tech sectors, including new energy vehicles (NEVs) and electronics, saw steady performance, these gains were not enough to offset broader losses in traditional industries.
'Downward pressure on the economy persists, and profitability in key sectors remains uneven,' an NBS spokesperson said. 'Efforts are being intensified to boost domestic demand, optimize the industrial structure, and stabilize expectations.'
The latest figures come amid growing concerns over tariff-related risks, particularly following the escalation of trade measures involving the United States and the European Union. New tariffs on Chinese-made electric vehicles and clean tech exports are expected to further dampen sentiment in the months ahead, especially for export-oriented manufacturers.
Combined with a slowing property sector, tightening credit conditions, and lingering geopolitical tensions, these external headwinds are contributing to caution among industrial firms and investors.
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