China's Industrial Profits See Modest 0.1% Rise in First 11 Months of 2025, Driven by High-Tech and Equipment Manufacturing

Overall Growth and Cumulative Trend

Profits of China's major industrial firms collectively increased by 0.1 percent year-on-year in the first 11 months of 2025, according to data released by the National Bureau of Statistics (NBS). This modest rise saw combined profits reach nearly 6.63 trillion yuan during the January-November period. The cumulative growth rate has maintained a positive trajectory for four consecutive months since August, indicating a sustained, albeit slight, recovery in industrial performance.

November Sees Monthly Decline Amidst Broader Recovery

Despite the positive cumulative figure for the first 11 months, November alone presented a more challenging picture. Profits at China's industrial firms fell by 13.1 percent year-on-year in November, marking the fastest decline in over a year and accelerating from a 5.5 percent drop in October. This monthly contraction contributed to a slowdown in the overall 11-month growth rate, which eased from a 1.9 percent increase recorded in the January-October period. NBS statistician Yu Weining noted that while profit growth moderated slightly, the upward trend observed since August has been sustained.

Key Drivers: High-Tech and Equipment Manufacturing

The overall profit increase was largely underpinned by robust performances in specific sectors. Equipment manufacturing saw profits surge by 7.7 percent year-on-year during the first 11 months, contributing 2.8 percentage points to the total industrial profit growth. Within this sector, seven out of eight major categories reported profit increases.

High-tech manufacturing also demonstrated significant momentum, with profits growing by 10 percent year-on-year. This accelerated by 2 percentage points from the January-October period and outpaced the overall industrial average by 9.9 percentage points. Notably, profits in electronics-specialized equipment manufacturing soared by 57.4 percent year-on-year, a rise attributed in part to the nationwide 'AI Plus' initiative. Additionally, the raw materials manufacturing sector experienced a 16.6 percent rise in profits.

Challenges and Outlook

While some sectors thrived, others faced significant headwinds. Profits for mining firms shrank by 27.2 percent, with the coal mining and washing industry seeing a sharp 47.3 percent fall, and the oil and gas extraction industry declining by 13.6 percent. State-owned firms experienced a 1.6 percent dip in earnings, and private-sector companies recorded a 0.1 percent decrease.

The NBS highlighted that weak domestic demand and persistent factory-gate deflation continue to weigh on corporate earnings. Yu Weining emphasized that the recovery in industrial firms' profitability still requires a firmer foundation, citing a complex external environment, external uncertainties, and ongoing structural pressures as challenges. Looking ahead, policymakers have pledged to maintain a 'proactive' fiscal policy in the coming year to bolster both consumption and investment, aiming to accelerate industrial upgrading and foster new quality productive forces.