NINGBO, CHINA – JANUARY 22: Employees work on the production line of snowboards at a workshop to meet the orders on January 22, 2026 in Ningbo, Zhejiang Province of China.
He Yuankai/Zhejiang Daily Press Group | Visual China Group | Getty Images
China’s industrial profits rose 0.6% in 2025 from a year earlier, snapping three consecutive years of declines as manufacturing output expanded despite weak domestic demand.
The pace of growth accelerated from 0.1% in the January-to-November period, according to data from the National Bureau of Statistics.
The recovery last year was driven by policy intervention, particularly Beijing’s campaign against aggressive price undercutting, and companies’ efforts to expand overseas, said Tianchen Xu, a senior economist at the Economist Intelligence Unit.
Industrial profits climbed 5.3% in December from a year earlier, marking the best performance since September when earnings surged 21.6%. Profits had faltered in the prior two months, falling 5.5% in October and 13.1% in November.
In December, China’s factory activity returned to growth after eight straight months of contraction, in part thanks to pre-holiday stockpiling ahead of the Lunar New Year in February, an official at the statistics bureau said.
Profits at the country’s major industrial firms have been battered by the bruising price wars sweeping across several industries last year as sluggish consumer demands left companies grappling with excess capacity.
Beijing appears to be taking some comfort from the headline economic growth last year that met the official target of 5%, helped by strong export growth as a one-year U.S.-China trade truce kept higher tariffs at bay.
Economists, however, have called for further policy support to bolster domestic demand and broad economic growth. Retail sales grew 3.7% in 2025 from a year earlier, lagging behind the overall economic growth and a 5.9% expansion in industrial output.
At a press briefing on Monday, Yang Mu, an official at the Chinese Commerce Ministry, said Beijing will step up efforts to boost household spending on cars, home appliances, and electronic goods, while targeting consumption in the services sector.
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